The Central Bank of Nigeria (CBN) has partnered with the Financial Markets Dealers Association (FMDA) to introduce the Nigerian Overnight Financing Rate (NOFR) as a standardized money market benchmark. This initiative is designed to boost transparency, improve the transmission of monetary policy, and deepen the Nigerian money market.

The introduction of NOFR was announced in a statement signed by Hakama Ali, the CBN's Acting Director of Corporate Communications. The central bank stated that this move aligns Nigeria with global best practices, aiming to enhance price discovery and transparency within the financial system.

The new benchmark is expected to bolster investor confidence and strengthen risk management across Nigeria's financial landscape. The CBN highlighted that NOFR was developed to bring Nigeria in line with international standards for short-term interest rate benchmarks, similar to SOFR in the United States, SONIA in the United Kingdom, €STR in the Eurozone, and TONA in Japan. It also complements existing African benchmarks like South Africa's JIBAR.

Following a stakeholder engagement session on February 27, 2026, where market participants formally adopted the benchmark, and subsequent regulatory approval, NOFR is now operational. The CBN will act as the benchmark administrator, ensuring the rate is governed with transparency and published regularly.

The statement emphasized that NOFR is expected to promote consistent pricing of money market instruments, enhance monetary policy effectiveness, support financial innovation, and improve overall risk management within the financial system.