The Central Bank of Nigeria (CBN), in collaboration with the Financial Markets Dealers Association (FMDA), has announced the introduction of the Nigerian Overnight Financing Rate (NOFR).
Mrs Hakama Sidi-Ali, CBN’s Acting Director, Corporate Communications Department, (NOFR) said this in a statement issued in Abuja on Friday.
According to Sidi-Ali, this is a standardised benchmark aimed at enhancing transparency, strengthening monetary policy transmission, and deepening Nigeria’s money market.
She said that NOFR was developed to align Nigeria with global best practices in short-term interest rate benchmarks.
She said that it was expected to improve price discovery and transparency while
promoting consistent pricing of money market instruments.
“It will enhance the effectiveness of monetary policy, support financial innovation, boost investor
confidence, and strengthen risk management across the financial system.
“The introduction of NOFR positions Nigeria alongside leading global benchmarks such as SOFR (United States), SONIA (United Kingdom), €STR (Eurozone), and TONA
(Japan).
“It also complements African benchmarks such as JIBAR (South Africa).
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“Following a stakeholders’ engagement session held on Feb. 27, where market participants formally adopted the benchmark, and subsequent regulatory approval, NOFR is now in use, with the CBN serving as the benchmark administrator.”
She said that the CBN would ensure governance, transparency, and regular publication of the rate.
