The Central Bank of Nigeria has introduced the Nigerian Overnight Financing Rate (NOFR), marking a new development in the country’s financial system.
Developed in collaboration with the Financial Markets Dealers Association, the rate will function as a benchmark aimed at enhancing transparency and efficiency within Nigeria’s money market.
In a statement issued on Friday and signed by the Acting Director of Corporate Communications, Hakama Sidi Ali, the apex bank explained that NOFR would serve as a uniform reference rate for overnight funding, supporting more effective monetary policy transmission and strengthening the financial system.
The CBN noted that the benchmark brings Nigeria in line with global standards for short-term interest rate frameworks, while improving price discovery and ensuring uniform pricing across money market instruments.
“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 said.
With the introduction of NOFR, Nigeria joins other jurisdictions that operate similar benchmarks, including the Secured Overnight Financing Rate (SOFR), Sterling Overnight Index Average (SONIA), Euro Short-Term Rate (€STR), and Tokyo Overnight Average Rate (TONA). It also aligns with Africa’s Johannesburg Interbank Average Rate (JIBAR).
The CBN added that the benchmark was developed following a stakeholder engagement held on February 27, 2026, where market participants formally endorsed the rate, before receiving regulatory approval for implementation.
The initiative further supports alignment with regional benchmarks such as JIBAR, strengthening Nigeria’s position within the global financial system.