The Central Bank of Nigeria (CBN) has officially launched the Nigeria Overnight Financing Rate (NOFR), a new transaction-based benchmark interest rate aimed at strengthening transparency, integrity and efficiency in Nigeria’s financial markets.
CBN Governor, Olayemi Cardoso, unveiled the rate at a ceremony in Abuja on Monday, describing it as a transformative step that brings Nigeria’s financial system in line with global best practices in benchmark interest rate reform.
The NOFR was developed by the CBN in collaboration with the Financial Markets Dealers (FMDA), with technical support from the European Bank for Reconstruction and Development (EBRD).
The new benchmark is derived entirely from actual market transactions, providing what the CBN says is a more credible and robust measure of overnight funding costs in Nigeria’s money market.
Cardoso said the recent global financial developments had made it imperative for countries to transition away from subjective, estimate-driven rates toward benchmarks grounded in observable market activity.
“NOFR is not only about today’s market needs but also about preparing for future developments,” the Governor said, framing the launch as part of a broader reform agenda to position Nigeria’s financial system for an increasingly digital and interconnected global economy.
He argued that stronger market infrastructure is essential to attracting foreign capital, reducing cross-currency risks for financial institutions and their customers, and giving offshore investors the reliable benchmarks they need to participate confidently in Nigeria’s markets.
“Nigeria’s ambition to deepen its financial markets and increase its participation in global capital flows cannot be achieved without this kind of infrastructure, and NOFR is a critical component of that journey,” Cardoso said.
He added: ”The institutions we build today will determine our ability to compete tomorrow.”
Financial market operators and dealers at the event welcomed the development, describing it as a landmark moment for market transparency, investor confidence, and long-term financial sector development in Nigeria.
