Key points
Nigeria’s overnight funding market recorded N97.45 trillion in transactions in June, the highest monthly turnover in the review period.
Market volume jumped 42.6% to N96.36 trillion in May before rising a further 1.1% in June.
Despite the surge in transactions, the Nigerian Overnight Financing Rate remained at exactly 22% on 59 of 62 trading days reviewed.
Main Story
Nearly N100 trillion changed hands in Nigeria’s overnight funding market in June, but the cost of short-term money barely moved — offering an early test of the Central Bank of Nigeria’s newest financial market benchmark.
An analysis of Nigerian Overnight Financing Rate (NOFR) data between April 13 and July 9, 2026, shows total market turnover rose to N97.45 trillion in June, the highest monthly volume recorded during the review period.
The surge followed a sharp increase in May, when transaction volume climbed 42.6% to N96.36 trillion from N67.58 trillion in April.
Yet, despite trillions of naira flowing between eligible financial institutions, the benchmark overnight funding rate remained almost frozen at 22%.
NOFR closed at exactly 22% on 59 of the 62 trading days analysed.
The benchmark moved above that level only three times — rising to 22.04% on April 15, 22.01% on April 16 and 22.02% on April 29.
By July 9, daily transaction volume stood at N5.02 trillion, with individual transactions priced between 21% and 22%, while the weighted benchmark again settled at 22%.
The numbers paint a striking picture: Nigeria’s overnight market is getting busier, but the benchmark price of short-term liquidity is barely moving.
The Issues
The unusual combination of rising transaction volumes and an almost unchanged benchmark rate raises questions about what NOFR is already revealing about liquidity conditions in Nigeria’s financial system.
Typically, tighter liquidity can increase short-term funding costs as financial institutions compete for available cash.
However, the latest data show institutions executing significantly larger overnight transactions without sustained upward pressure on the benchmark rate.
This could suggest that liquidity conditions remained sufficiently balanced to absorb stronger market activity.
But the remarkable stability of NOFR at exactly 22% will also attract attention as the benchmark develops a longer trading history.
For market participants, the key question is whether the stability reflects efficient price discovery and balanced liquidity or the early-stage characteristics of a newly introduced benchmark.
What the Data is Saying
Average daily transaction volume rose 10.9% to N5.35 trillion in May from N4.83 trillion in April.
Daily activity moderated to about N4.64 trillion in June, although total monthly turnover still reached a record N97.45 trillion.
Some trading sessions recorded particularly heavy flows.
May 6 emerged as the busiest day in the period under review, with N7.32 trillion in transactions.
This was followed by N6.77 trillion on May 19, N6.67 trillion on May 5 and N6.57 trillion on May 26.
April’s highest daily turnover was N6.16 trillion on April 30, while June peaked at N5.61 trillion on June 3.
At the lower end, July 3 recorded N2.99 trillion in transactions, the smallest daily volume reviewed.
May 21 and June 8 also posted relatively subdued activity of N3.13 trillion and N3.19 trillion, respectively.
Individual transaction rates showed considerably more movement than the benchmark.
Minimum rates fell as low as 20%, while maximum transaction rates reached 32% during some trading sessions.
Despite those wide differences, the weighted NOFR remained anchored around 22%, suggesting isolated high- or low-cost transactions had limited influence on the broader market benchmark.
More Insights
The N97.45 trillion recorded in June is significant because NOFR is still a relatively new benchmark in Nigeria’s financial market architecture.
The CBN announced the introduction of the benchmark in April 2026 following its adoption by market stakeholders in February.
Its formal public launch followed on June 15 at the CBN headquarters in Abuja.
NOFR is designed to reflect the cost of secured overnight naira funding among eligible financial institutions using actual market transactions.
This makes the benchmark important for price discovery, financial contract standardisation and the transmission of monetary policy across the financial system.
The rapid growth in transaction volumes could also strengthen the depth of data supporting the benchmark as more market activity is captured.
July’s cumulative N28.03 trillion turnover covers only the first seven trading sessions reviewed and should not be compared directly with completed monthly figures.
Duplicate records identified for April 13 and June 2 were excluded from the monthly volume calculations.
What’s Being Said
At the formal launch of NOFR in June, CBN Governor Olayemi Cardoso described benchmark rates as critical to the functioning of a modern financial system.
According to the CBN, the new rate is expected to improve transparency, strengthen price discovery and support more effective monetary policy transmission.
The apex bank also expects NOFR to align Nigeria’s money market with global benchmark reforms.
Similar overnight reference rates include the Secured Overnight Financing Rate in the United States, Sterling Overnight Index Average in the United Kingdom, the Euro Short-Term Rate and Japan’s Tokyo Overnight Average Rate.
For the CBN, NOFR is part of a broader effort to create a more transparent and credible framework for determining the price of short-term money in Nigeria.
What You Should Know
The Nigerian Overnight Financing Rate is Nigeria’s transaction-based benchmark for secured overnight naira funding among eligible financial institutions.
Unlike a rate based mainly on estimates or submissions, NOFR is calculated from actual transactions in the overnight funding market.
The CBN introduced the benchmark in collaboration with the Financial Markets Dealers Association as part of reforms aimed at improving transparency and standardising the pricing of financial instruments.
The benchmark could increasingly become important in the pricing of loans, deposits and other financial contracts as adoption deepens.
Its stability and transaction volumes will therefore be closely watched by banks, investors and policymakers seeking to understand short-term liquidity conditions.
What’s Next
Market participants will be watching whether NOFR remains anchored at 22% as transaction volumes expand and liquidity conditions change. The benchmark’s response to future monetary policy decisions will also be critical.
A key test will be whether NOFR effectively transmits changes in system liquidity and monetary policy into the broader financial market.
July’s full trading data will provide further insight into whether the near-N100 trillion monthly turnover recorded in June represents a sustained expansion in overnight market activity.
Bottom Line
Nigeria’s new overnight funding benchmark is already sitting at the centre of a massive pool of financial transactions, with N97.45 trillion traded in June alone.
The bigger story, however, is the price of that money.
Despite a sharp rise in market activity and individual transactions ranging as high as 32%, NOFR remained almost permanently fixed at 22%.
As the benchmark matures, its ability to respond transparently to liquidity and monetary policy conditions will determine whether it becomes the credible price-of-money reference the CBN designed it to be.
