CBN, financial markets dealers introduce new money market benchmark
CBN, Financial Markets Dealers Introduce New Money Market Benchmark
By Elizabeth Adegbesan
The Central Bank of Nigeria (CBN) has partnered with the Financial Markets Dealers Association (FMDA) to launch the Nigerian Overnight Financing Rate (NOFR) as a new benchmark for the money market. This initiative aims to promote consistent pricing of money market instruments.
The CBN announced the introduction of NOFR in a circular released on Friday. The document, signed by the Acting Director of Corporate Communication, Hakkama Ali, outlines the objectives of the new benchmark.
“The Central Bank of Nigeria (CBN), in collaboration with the Financial Markets Dealers Association (FMDA), today announced 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 circular stated.
The establishment of NOFR follows a stakeholder engagement session held on February 27, 2026, during which market participants formally adopted the benchmark. The CBN will serve as the administrator of NOFR, following regulatory approval.
The CBN emphasized that the new rate aligns Nigeria with global best practices in short-term interest rate benchmarks. Officials expect NOFR to improve price discovery and transparency while fostering consistent pricing across money market instruments.
“This initiative will enhance the effectiveness of monetary policy, support financial innovation, boost investor confidence, and strengthen risk management across the financial system,” the CBN added.
With the introduction of NOFR, Nigeria joins the ranks of leading global benchmarks such as 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 complements existing African benchmarks like the Johannesburg Interbank Average Rate (JIBAR) in South Africa.
The CBN commits to ensuring proper governance, transparency, and regular publication of the NOFR.
