The Central Bank of Nigeria (CBN), in collaboration with the Financial Markets Dealers Association (FMDA), has announced the introduction of the Nigerian Overnight Financing Rate (NOFR), a new benchmark designed to enhance transparency, improve monetary policy transmission, and deepen the country’s money market.
The CBN disclosed that the NOFR aligns Nigeria’s financial system with global best practices in short-term interest rate benchmarks.
The rate is expected to improve price discovery, ensure greater transparency, and promote consistent pricing across money market instruments.
According to a statement issued by the CBN’s Acting Director of Corporate Communications, Hakama Sidi Ali, the benchmark will also strengthen the effectiveness of monetary policy, support financial innovation, boost investor confidence, and enhance risk management across the financial system.
With the launch of NOFR, Nigeria joins jurisdictions that operate similar benchmarks, including the Secured Overnight Financing Rate (SOFR) in the United States, the Sterling Overnight Index Average (SONIA) in the United Kingdom, the Euro Short-Term Rate (€STR) in the Eurozone, and the Tokyo Overnight Average Rate (TONA) in Japan.
It also complements African benchmarks such as the Johannesburg Interbank Average Rate (JIBAR) in South Africa.
The benchmark follows a stakeholder engagement session held on February 27, 2026, during which market participants formally adopted the rate.
After securing regulatory approval, NOFR has now come into operation, with the CBN designated as its administrator.
The apex bank stated that it will ensure robust governance, transparency, and the regular publication of the rate to support market confidence and integrity.
