By Damilare Adeleye
The Central Bank of Nigeria has introduced the Nigerian Overnight Financing Rate (NOFR) as a new benchmark for the country’s money market, aimed at strengthening monetary policy transmission and enhancing market transparency.
In a release issued Friday by Hakama Sidi Ali, Acting Director, Corporate Communications, the apex bank said the initiative was developed with the Financial Markets Dealers Association to align Nigeria’s financial system with global best practices for short-term interest rate benchmarks.
“The introduction of the Nigerian Overnight Financing Rate (NOFR), a standardized benchmark, aimed at enhancing transparency, strengthening monetary policy transmission, and deepening Nigeria’s money market,” the CBN said.
The bank said NOFR is expected to improve price discovery and ensure more consistent pricing of money market instruments, while boosting investor confidence and supporting financial innovation.
“It will enhance the effectiveness of monetary policy, support financial innovation, boost investor confidence, and strengthen risk management across the financial system,” the statement read.
The CBN noted the new rate places Nigeria alongside major global benchmarks such as SOFR in the United States, SONIA in the United Kingdom, €STR in the Eurozone, and TONA in Japan, and complements Africa’s JIBAR benchmark in South Africa.
Following a stakeholder engagement on February 27, 2026, and subsequent regulatory approvals, the bank confirmed NOFR has been formally adopted and is now operational, with the CBN as benchmark administrator.
“The Bank will ensure governance, transparency, and regular publication of the rate,” the statement added.