Categories: News

CBN, FMDA launch new overnight benchmark rate for money market

The Central Bank of Nigeria (CBN) and the Financial Markets Dealers Association (FMDA) have jointly introduced the Nigerian Overnight Financing Rate (NOFR), a new standardised benchmark designed to strengthen the country’s money market.

The CBN’s Acting Director of Corporate Communications, Mrs. Hakama Sidi-Ali, announced this in a statement issued in Abuja on Friday.

According to Sidi-Ali, the NOFR was developed to align Nigeria with global best practices in short-term interest rate benchmarking, with the rate expected to improve price discovery, enhance transparency, and promote 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,” she said.

The new benchmark positions Nigeria alongside internationally recognised rates such as the SOFR in the United States, SONIA in the United Kingdom, €STR in the Eurozone, TONA in Japan, and JIBAR in South Africa.

The NOFR was formally adopted by market participants at a stakeholders’ engagement session held on February 27, before receiving subsequent regulatory approval.

The CBN, which serves as the benchmark administrator, said it would ensure governance, transparency, and regular publication of the rate.

LUKMAN ABDULMALIK

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