Mkpoikana Udoma
Port Harcourt — The Central Bank of Nigeria, CBN, has launched the Nigerian Overnight Financing Rate, NOFR, a new benchmark aimed at improving transparency, price discovery and efficiency in Nigeria’s financial markets.
Speaking at the launch ceremony in Abuja, CBN Governor, Mr. Olayemi Cardoso, described NOFR as a significant milestone in the ongoing reform of the country’s financial system and a key tool for strengthening market integrity.
According to Cardoso, the new benchmark is designed to reflect the actual cost of overnight funding in Nigeria’s money market through a transparent, transaction-based methodology.
He noted that the introduction of NOFR would enhance the credibility of market pricing, improve risk management practices and increase investor confidence in Nigeria’s financial system.
“NOFR is a transparent, transaction-based benchmark designed to reflect the true cost of overnight funding in the money market,” Cardoso said.
The CBN Governor added that the initiative forms part of broader efforts to modernize Nigeria’s financial market infrastructure and align it with global best practices.
He emphasized that reliable benchmark rates are essential for efficient market operations, pricing of financial instruments and effective monetary policy transmission.
Cardoso stated that the introduction of NOFR would support deeper market development by providing market participants with a credible reference rate for financial transactions.
The benchmark was developed through collaboration between the CBN and the Financial Markets Dealers Association, FMDA, with technical support from the European Bank for Reconstruction and Development, EBRD.
The apex bank said the partnership reflects a shared commitment to strengthening the architecture of Nigeria’s financial markets and enhancing their attractiveness to domestic and foreign investors.
Market stakeholders expect the benchmark to improve transparency in the money market, facilitate more efficient pricing of financial products and support the development of new financial instruments.
The launch of NOFR is expected to contribute to the deepening of Nigeria’s financial markets, improve market confidence and support sustainable economic growth through a more robust and transparent financial system.
