ADVERTISEMENT

ADVERTISEMENT

The Central Bank of Nigeria (CBN) in collaboration with the Financial Markets Dealers Association (FMDA) has introduced the Nigerian Overnight Financing Rate (NOFR).

The new initiative is a standardized benchmark, aimed at enhancing transparency, strengthening monetary policy transmission, and deepening Nigeria’s money market.

The introduction of the NOFR was made known in a statement issued on Sunday by the Director, Corporate Communications of the CBN, Mrs. Hakama Sidi Ali.

The apex bank explained that the NOFR was developed to align Nigeria with global best practices in short-term interest
rate benchmarks.

Moreover, it said the initiative 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 CBN said.

The introduction of NOFR positions Nigeria alongside leading global benchmarks such as SOFR in the United States, SONIA in the United Kingdom, €STR in the Eurozone, and TONA in Japan.

Also, it complements African benchmarks such as the JIBAR in South Africa.

The CBN added that the benchmark was adopted after a stakeholder engagement session held on February 27, 2026, with market participants formally endorsing the initiative.

It further disclosed that following the 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 statement stated.

ADVERTISEMENT

ADVERTISEMENT

The Nigerian naira depreciated slightly against the United States (US) dollar, trading at N1,343.6398 per dollar at the Central Bank of Nigeria (CBN) official foreign exchange window on Friday, 17th April, 2026.

According to the data on the CBN’s official platform, the naira traded at the Nigerian Foreign Exchange Market (NFEM) rate of N1,343.6398/$per dollar and closed at N1,342.5000 per dollar.

When compared with the previous trading rate, the Nigerian currency traded at N1342.3037 on 16th April, 2026. With this, the Nigerian currency depreciated slightly by a minimum of N1.3.

At the parallel market, the naira-to-dollar exchange rate for the buying rate didn’t change while the selling rate increased by N3 when compared to that of the previous trading rate.

According to Aboki FX , the Naira-to-dollar exchange rate at the black market on Friday, 17th April, 2026, was N1,395 and N1,405 per dollar for buying and selling rate respectively.

ADVERTISEMENT

ADVERTISEMENT

The Central Bank of Nigeria on Friday unveiled the Nigerian Overnight Financing Rate (NOFR) as a new benchmark for the country’s money market, a move aimed at boosting transparency and improving the effectiveness of monetary policy.

The announcement was made in a statement by the bank’s Acting Director of Corporate Communications, Hakama Sidi-Ali, who noted that the initiative was developed in partnership with the Financial Markets Dealers Association to strengthen Nigeria’s financial system.

According to the apex bank, the new benchmark is designed to bring Nigeria in line with global standards for short-term interest rates, while enhancing price discovery and ensuring more consistent pricing across money market instruments.

The CBN explained that NOFR is expected to improve monetary policy transmission, encourage financial innovation, and boost investor confidence, while also reinforcing risk management practices within the financial system.

With the introduction of NOFR, Nigeria joins other economies that use similar benchmarks, such as SOFR in the United States, SONIA in the United Kingdom, €STR in the Eurozone, TONA in Japan, and JIBAR in South Africa.

The bank disclosed that the rate followed a stakeholder engagement held on February 27, 2026, where market participants adopted the framework before receiving regulatory approval. NOFR is now operational, with the CBN serving as its administrator and responsible for ensuring transparency, governance, and regular publication.

Further details provided in an FAQ document show that NOFR is a risk-free benchmark reflecting the cost of overnight secured lending in the interbank market. Unlike estimates, it is based strictly on actual transactions, improving accuracy and credibility.

The rate is published daily at 10:00 a.m. on the next business day and applies only to naira-denominated overnight secured interbank transactions that meet specified criteria. It is calculated using a volume-weighted trimmed mean approach to remove outliers and ensure reliability.

Where there is insufficient transaction data, the previous day’s rate will be retained and clearly disclosed to maintain consistency.

The CBN clarified that NOFR is not a replacement for key monetary policy tools such as the Monetary Policy Rate but will serve as a reference for pricing financial instruments, contracts, and some corporate loans.

For investors, the benchmark is expected to improve valuation, pricing, and risk management of naira assets, thereby deepening activity in the domestic money market.

While retail customers may not see immediate changes in loan or savings rates, the bank noted that increased transparency from the new system should strengthen overall confidence in Nigeria’s financial sector.

On governance, the CBN stated that any adjustments to the rate would only occur in cases of significant errors and would be fully disclosed, adding that the methodology will be reviewed at least once a year to keep it aligned with market realities.