Abuja: 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 of Corporate Communications, announced this in a statement issued in Abuja on Friday.
Sidi-Ali said the standardised benchmark aims to enhance transparency, strengthen monetary policy transmission, and deepen Nigeria’s money market.
She added that NOFR was developed to align Nigeria with global best practices in short-term interest rate benchmarks.
It is expected to improve price discovery, enhance transparency, and promote consistent pricing of money market instruments.
“It will enhance the effectiveness of monetary policy, support financial innovation, boost investor confidence
confidence, and strengthen risk management across the financial system.
According to Mrs Sidi-Ali, “The introduction of NOFR positions Nigeria alongside leading global benchmarks such as SOFR (United States), SONIA (United Kingdom), €STR (Eurozone), and TONA (Japan).”
Mrs Sidi-Ali also noted, “It also complements African benchmarks such as JIBAR (South Africa).”
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She said, following a stakeholders’ engagement on Feb. 27, market participants formally adopted the benchmark. After regulatory approval, NOFR is now in use. The CBN serves as the benchmark administrator.
She said that the CBN would ensure governance, transparency, and regular publication of the rate.