The Central Bank of Nigeria (CBN) has introduced the Nigerian Overnight Financing Rate (NOFR), a new benchmark interest rate aimed at improving transparency, deepening the money market, and strengthening monetary policy effectiveness.
- +BREAKING: CBN launches NOFR benchmark, adopts new overnight rate for markets
The apex bank announced the development in collaboration with the Financial Markets Dealers Association, describing it as a key reform to align Nigeria’s financial system with global standards for short-term interest rate benchmarks.
The apex bank announced the development in collaboration with the Financial Markets Dealers Association, describing it as a key reform to align Nigeria’s financial system with global standards for short-term interest rate benchmarks.
In a statement signed by Hakama Sidi Ali, the CBN said the new rate is expected to enhance price discovery and promote transparency in the pricing of money market instruments.
The Nigerian Overnight Financing Rate (NOFR) is a transaction-based benchmark for the money market, reflecting the interest rate for secured overnight funds in the interbank market.
The CBN said the introduction of NOFR will improve the overall functioning of Nigeria’s financial markets and strengthen policy transmission mechanisms.
The bank added that the rate will serve as a credible benchmark for short-term lending activities in the Nigerian financial market.
The introduction of NOFR positions Nigeria alongside major global economies that have adopted similar benchmark rates for financial market stability and transparency.
The move also complements regional benchmarks such as the Johannesburg Interbank Average Rate (JIBAR), reinforcing Nigeria’s integration into global financial markets.
The development of NOFR followed a structured engagement process with stakeholders in Nigeria’s financial system.
