CBN, FMDA launch Nigerian overnight financing rate as new money market benchmark

THE Central Bank of Nigeria (CBN) has introduced the Nigerian Overnight Financing Rate (NOFR) as a new benchmark for the country’s money market, in collaboration with the Financial Markets Dealers Association.

In a statement released on Friday signed by Acting Director of Corporate Communications at the CBN, Ms Hakama Sidi Ali, the apex bank said the NOFR is designed to improve transparency, strengthen monetary policy transmission, and deepen Nigeria’s financial markets. The benchmark will serve as a standardised reference rate for overnight funding, helping to ensure more consistent pricing across money market instruments.

According to the CBN, the development of NOFR aligns Nigeria with global best practices in short-term interest rate benchmarks. The bank noted that the new rate is expected to enhance price discovery, boost investor confidence, and support financial innovation, while also strengthening risk management across the financial system.

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With the introduction of NOFR, Nigeria joins other major economies that have adopted 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 aligns with Africa’s Johannesburg Interbank Average Rate (JIBAR) used in South Africa.

The rollout follows a stakeholder engagement session held on February 27, 2026, where market participants formally adopted the benchmark. After securing regulatory approval, the NOFR has now been implemented, with the CBN serving as its benchmark administrator.

The CBN added that it will oversee the governance of the rate, ensuring transparency and regular publication to support credibility and market confidence.