New rand money-market benchmark for South Africa

South Africa’s derivatives market will begin using the central bank’s new rand money-market benchmark to price short-term loans this year.

The South African Rand Overnight Index Average, or Zaronia, which replaces the Johannesburg Interbank Average Rate, will be used by the derivatives markets in new contracts from the second half of this year, the central bank said.

The decision to focus on the derivatives market was based on recommendations by the Financial Stability Board that its securities tend to be better suited to reference rates that are credit risk-free or nearly risk-free, the central bank said.

“The relative ease of transition in this market could then serve to assist the transition in other markets,” the bank said in a paper published on its website.

Zaronia will then be rolled out to cash markets next year, and Jibar will cease to exist in 2026.

Zaronia is based on actual transactions, making it comparable to other rates including the Euro Short-Term Rate and the Sterling Overnight Index Average.

Its introduction adds to global reform efforts and a shift away from the London Interbank Offered Rate — previously the most commonly used reference rate in financial markets — following scandals involving its manipulation.


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