CBN’S NOFR LAUNCH SIGNALS NEW ERA FOR TRANSPARENT MONEY MARKETS

The Central Bank of Nigeria (CBN) has launched the Nigerian Overnight Financing Rate (NOFR), a transaction-based benchmark designed to usher in greater transparency, efficiency, and global alignment in the country’s money markets.

Announced by CBN Governor Olayemi Cardoso, the NOFR replaces earlier indicative rates with a robust, secured overnight reference rate derived from actual interbank transactions. Published daily at 10:00 am, it is expected to improve price discovery, strengthen monetary policy transmission, and enhance the pricing of loans, deposits, Treasury bills, bonds, and other financial instruments.

Developed in collaboration with the Financial Markets Dealers Association (FMDA) and with technical support from the European Bank for Reconstruction and Development, the new benchmark positions Nigeria alongside major economies such as the US, UK, and Eurozone that use similar risk-free rates.

Cardoso described the initiative as a structural upgrade that will boost investor confidence, reduce manipulation risks, and deepen the financial markets. Stakeholders believe NOFR will foster a more predictable lending environment, support better risk management, and attract both local and foreign capital into Nigeria’s money market.

The launch forms part of broader reforms aimed at modernising Nigeria’s financial architecture and building resilience in the face of economic challenges. Market participants have welcomed the development as a significant milestone for the country’s financial system.