CBN Launches Nigerian Overnight Financing Rate for Market Credibility

The Central Bank of Nigeria (CBN) unveiled the Nigerian Overnight Financing Rate (NOFR) at its headquarters in Abuja, aimed at boosting the credibility of the financial market. Governor Mr.

Olayemi Cardoso stated that the NOFR is a significant reform that aligns Nigeria's financial market with global best practices, providing a reliable reference rate for banks and investors. The introduction of the NOFR is part of the CBN's broader strategy to build a resilient and efficient financial system.

Cardoso explained that the benchmark interest rate serves as the backbone of a modern financial system, facilitating price management of financial instruments and improving monetary policy transmission. The CBN developed the NOFR in collaboration with the Financial Market Dealers Association and with technical support from the European Bank for Reconstruction and Development.

The new framework aims to enhance market integration, reduce reliance on estimations, and improve price discovery and transparency, thereby strengthening confidence in Nigeria's financial market and supporting economic growth.