CBN, FMDA collaborate, introduce new money market benchmark

The Central Bank of Nigeria (CBN) has collaborated with the Financial Markets Dealers Association (FMDA) to introduce the Nigerian Overnight Financing Rate (NOFR) as a standardised money market benchmark. The CBN said the effort is aimed at enhancing transparency, strengthening monetary policy transmission, and deepening Nigeria’s money market. The introduction of NOFR was disclosed in a statement signed by the CBN Acting Director, Corporate Communications, Hakama Ali, on Friday. According to the central bank, the money market benchmark was introduced to align Nigeria with global best practices and to improve price discovery and transparency. The CBN added that the effort will also boost investor confidence and strengthen risk management across the Nigerian financial system. “NOFR was developed to align Nigeria with global best practices in short-term interest rate benchmarks. It is expected to improve price discovery and transparency while promoting consistent pricing of money market instruments. “It will enhance the effectiveness of monetary policy, support financial innovation, boost investor confidence, and strengthen risk management across the financial system,” the statement read. The CBN said the introduction of NOR was an outcome of stakeholders engagement in February, noting that the new benchmark is now in use, while the central bank serves as the benchmark administrator. “The introduction of NOR positions Nigeria alongside leading global benchmarks such as SOFR (United States), SONIA (United Kingdom), €STR (Eurozone), and TONA (Japan). It also complements African benchmarks such as JIBAR (South Africa). “Following a stakeholder engagement session held on 27 February 2026, where market participants formally adopted the benchmark and subsequent regulatory approval, NOFR is now in use, with the CBN serving as the benchmark administrator. “The Bank will ensure governance, transparency, and regular publication of the rate,” the central bank assured the money market stakeholders.