Abuja: The Central Bank of Nigeria (CBN) has launched the Nigerian Overnight Financing Rate (NOFR)—a transaction-based benchmark that marks a major step in modernising Nigeria’s financial markets.
NOFR is designed to capture the true cost of overnight funding in the interbank market, boosting transparency, credibility, and efficiency across the system.
At the Abuja launch, CBN Governor Olayemi Cardoso hailed NOFR as a strategic reform aligned with global best practices. He stressed that benchmark interest rates are vital in modern finance: they anchor pricing for financial instruments, sharpen liquidity and risk management, and improve how monetary policy flows through the economy.
NOFR was built with the Financial Markets Dealers Association (FMDA) and technical support from the European Bank for Reconstruction and Development (EBRD). Because it’s derived from actual market transactions, the rate reduces reliance on guesswork, lowers the risk of manipulation, sharpens price discovery, and strengthens market integrity.
Cardoso said NOFR will give banks, investors, and other participants a transparent, reliable benchmark for treasury operations, liquidity management, contract pricing, securities valuation, and the creation of more sophisticated financial products. The move also sets the stage for future benchmark rates and will help deepen Nigeria’s financial markets.