The Central Bank of Nigeria has launched the Nigerian Overnight Financing Rate, a new benchmark for the interest that banks charge one another on very short-term loans. The bank's Governor, Olayemi Cardoso, arrived at the launch venue in the company of top officials of the institution to unveil the new rate, which applies to interbank loans that last for a single day.
According to the central bank, the new rate is transaction-based and is built from actual overnight secured interbank deals rather than from estimates. It was developed in conjunction with the Financial Market Dealers Association, with technical support from the European Bank for Reconstruction and Development, as part of an effort to anchor the benchmark in real market activity.
Officials drew a clear contrast with older indicative rates, saying the new measure is designed to be transparent, credible and resistant to manipulation. By grounding the figure in concrete transactions, the bank argued, the rate gives a more reliable picture of the true cost of overnight funding in the financial system.
In his address, the governor framed the move as more than a technical tweak. He described it as not merely an adjustment but a structural upgrade to the very foundation of the country's money market, presenting it as a step that should reinforce confidence in how short-term funding is priced.
Cardoso situated the launch within what he called a focused and ambitious reform agenda built on three pillars, saying those pillars set the stage for the initiative being unveiled. He added that the new rate is expected to improve price discovery and strengthen transparency across the market.
The governor also reflected on the resilience of the financial system, noting that over the years it had repeatedly demonstrated its ability to adapt and transform. He pointed to the strengthening of market infrastructure, the enhancement of regulatory frameworks and the navigation of periods of extraordinary global and domestic uncertainty as part of that record.