“CBN Quietly Changes How Money Works in Nigeria — What This Means for Your Loans and Savings”
By Passman Akpos
Abuja — The Central Bank of Nigeria (CBN), in partnership with the Financial Markets Dealers Association (FMDA), has unveiled a new money market benchmark known as the Nigerian Overnight Financing Rate (NOFR), marking a significant shift in the country’s financial architecture.
In a press release issued Friday, the apex bank said the introduction of NOFR is aimed at boosting transparency, improving monetary policy effectiveness, and deepening Nigeria’s money market.
According to the CBN, the new benchmark is designed to align Nigeria with global standards in short-term interest rate measurement, ensuring more reliable pricing of financial instruments and strengthening investor confidence.
“This move will significantly enhance price discovery and foster consistency in the pricing of money market instruments,” the statement noted, adding that NOFR is expected to drive financial innovation and reinforce risk management practices across the banking and financial sectors.
The CBN emphasized that the initiative places Nigeria in the league of advanced economies that have adopted similar frameworks, including the United States’ Secured Overnight Financing Rate (SOFR), the United Kingdom’s Sterling Overnight Index Average (SONIA), the Eurozone’s Euro Short-Term Rate (€STR), and Japan’s Tokyo Overnight Average Rate (TONA). It also aligns with Africa’s Johannesburg Interbank Average Rate (JIBAR).
The development follows a stakeholder engagement session held on February 27, 2026, where key market participants formally adopted the benchmark, paving the way for regulatory approval and implementation.
With NOFR now officially in use, the CBN will act as the benchmark administrator, ensuring transparency, governance, and regular publication of the rate.
Industry analysts say the move could redefine Nigeria’s financial markets by providing a more credible and efficient reference rate for lending, borrowing, and investment decisions.
The statement was signed by Hakama Sidi Ali, Acting Director of Corporate Communications at the apex bank.
