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.
