CBN unveils overnight financing rate

The Central Bank of Nigeria (CBN) has officially launched the Nigeria Overnight Financing Rate (NOFR), a new benchmark interest rate designed to strengthen market transparency and efficiency. Speaking at the launch ceremony in Abuja on Monday, CBN Governor Olayemi Cardoso said the NOFR aligns with Nigeria’s financial system and quest for global best practices in […]

The Central Bank of Nigeria (CBN) has officially launched the Nigeria Overnight Financing Rate (NOFR), a new benchmark interest rate designed to strengthen market transparency and efficiency.
Speaking at the launch ceremony in Abuja on Monday, CBN Governor Olayemi Cardoso said the NOFR aligns with Nigeria’s financial system and quest for global best practices in benchmark interest rate reform.
The NOFR was developed by the CBN in collaboration with the Financial Markets Dealers Association (FMDA), with technical support from the European Bank for Reconstruction and Development (EBRD).
Cardoso at the launch said, “A benchmark interest rate represents the true price of money at a particular point in time. It is the backbone of any modern financial system.
“For a benchmark to gain widespread acceptance, it must be trusted, transparent, well-governed, and protected against manipulation.”
He explained that NOFR has been designed as a secured overnight interbank financing rate that reflects the actual cost of overnight funding by relying on observable market transactions.
Among its key benefits, Cardoso listed improved market integrity and credibility, reduced reliance on subjective estimates, lower risks of manipulation, and enhanced price discovery and transparency.
“This is a fundamental shift that aligns Nigeria with global best practices in benchmark rate reform and strengthens confidence in our financial markets,” he stated, adding, “The ultimate outcome is a deeper and more resilient financial market, which is what we all aspire to achieve.”
Also speaking at the event, Deputy Governor, Economic Policy Directorate, Philip Chukwuemeka Ikeazor, said Nigeria must position itself not merely to adapt to global changes in financial markets but to actively shape them.
In his remarks, David Enilolobo, representing the Group Managing Director of Access Bank Plc, said the bank had witnessed firsthand the benefits of strong market infrastructure.
According to him, robust market structures attract capital, reduce cross-currency risks for financial institutions and their customers, and provide offshore investors with reliable benchmarks they can trust.