The Central Bank of Nigeria (CBN) has unveiled the Nigerian Overnight Financing Rate (NOFR), a new benchmark aimed at enhancing transparency, efficiency, and stability in the country’s money market.
The apex bank, in a statement issued on Friday by its Acting Director of Corporate Communications, Hakama Sidi Ali, said the NOFR was developed in collaboration with the Financial Markets Dealers Association (FMDA) to serve as a standardised reference rate for overnight funding transactions.
According to the CBN, the introduction of the rate is expected to improve the transmission of monetary policy, deepen the financial system, and ensure more consistent pricing across money market instruments.
The bank noted that the NOFR aligns Nigeria with global best practices in short-term interest rate frameworks, strengthening price discovery while promoting a more transparent financial environment.
“The Nigerian Overnight Financing Rate is expected to improve transparency, promote financial innovation, boost investor confidence, and strengthen risk management across the financial system,” the statement read.
The CBN added that the new benchmark positions Nigeria alongside established global rates such as the Secured Overnight Financing Rate (SOFR), Sterling Overnight Index Average (SONIA), Euro Short-Term Rate (€STR), and Tokyo Overnight Average Rate (TONA), while also complementing regional benchmarks like the Johannesburg Interbank Average Rate (JIBAR).
The development of the NOFR followed a stakeholder engagement session held on February 27, 2026, where market participants formally adopted the framework. This was subsequently approved by regulators, clearing the path for its implementation.
The initiative is expected to further integrate Nigeria into the global financial system while supporting the evolution of its domestic money market.
CBN Introduces Nigerian Overnight Financing Rate to Strengthen Money Market
