CBN Introduces Overnight Financing Rate to Boost Transparency in Money Market
The Central Bank of Nigeria (CBN), in collaboration with the Financial Markets Dealers Association (FMDA), has introduced the Nigerian overnight financing rate (NOFR) to strengthen transparency in the country’s money market.
In a statement issued on Friday by the Acting Director, Corporate Communications, Hakama Sidi Ali, CBN said NOFR, a standardised benchmark, is designed to enhance price discovery, improve monetary policy transmission, and deepen Nigeria’s financial markets.
According to the apex bank, the benchmark was formally adopted by market participants during a stakeholder engagement session held on February 27, 2026, and has received regulatory approval.
“NOFR was developed to align Nigeria with global best practices in short-term interest rate benchmarks. It is expected to improve price discovery and transparency while promoting consistent pricing of money market instruments,” CBN said.
“It will enhance the effectiveness of monetary policy, support financial innovation, boost investor confidence, and strengthen risk management across the financial system.
“The introduction of NOFR positions Nigeria alongside leading global benchmarks such as SOFR (United States), SONIA (United Kingdom), €STR (Eurozone), and TONA (Japan). It also complements African benchmarks such as JIBAR (South Africa).”
The CBN added that NOFR is now operational, with the bank serving as the benchmark administrator, and will be responsible for governance, transparency, and regular publication of the rate.
