South Africa partners with London to adopt new Reserve Bank benchmark
South Africa is working with the London Stock Exchange to convert outstanding derivative contracts linked to a soon-to-be-abandoned rand reference rate to the country’s new benchmark.
South Africa’s central bank is collaborating with the stock exchange’s clearing house — LCH SwapClear — to hasten offshore adoption of the South African Rand Overnight Index Average, or Zaronia, before use of the old Johannesburg Interbank Average Rate, or Jibar, ends on 31 December.
The London clearing house “plans to convert all outstanding Jibar-linked derivatives contracts into Zaronia-linked instruments on 21 November,” the central bank said in an emailed response to questions.
“The conversion event follows LCH’s discount curve switch in April 2026, and will convert existing Jibar-linked cleared contracts to reference a newly constructed Zaronia curve.”
The planned conversion is a key step in boosting Zaronia’s adoption offshore, where market participants aren’t bound by a South African directive that prohibits the creation of new Jibar-linked contracts and the transition has lagged the domestic market.
Although the UK regulator communicated in July that affected firms should be well advanced in their transition plans, Zaronia-linked swaps accounted for about 30% of total rand volumes registered in July, compared with 20% the previous month, the central bank said.
The move to Zaronia mirrors shifts in the US and UK from measures like the London Interbank Offered Rate — once the most commonly used global reference rate — to more transparent and reliable benchmarks.
Zaronia is based on actual transactions, making it comparable to the Euro Short-Term Rate and the Sterling Overnight Index Average.
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