{"id":862706,"date":"2026-06-08T12:30:00","date_gmt":"2026-06-08T10:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=862706"},"modified":"2026-06-08T12:37:49","modified_gmt":"2026-06-08T10:37:49","slug":"one-of-the-biggest-changes-to-interest-rates-in-south-africas-history-coming-this-year","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/862706\/one-of-the-biggest-changes-to-interest-rates-in-south-africas-history-coming-this-year\/","title":{"rendered":"One of the biggest changes to interest rates in South Africa’s history coming this year"},"content":{"rendered":"\n

South Africa’s transition to ZARONIA is getting closer to reality and marks one of the largest structural shifts for the country’s capital markets. <\/p>\n\n\n\n

Many South Africans may not know what JIBAR (the Johannesburg Interbank Average Rate) and ZARONIA (South African Rand Overnight Index Average) are. <\/p>\n\n\n\n

The indices refer to the rates at which financial organisations, mainly banks, lend to one another. SA Home Loans is a rare example of a company that used JIBAR in pricing its products to retail customers. <\/p>\n\n\n\n

Although not a common measure for retail banking customers, the shift from JIBAR to ZARONIA markets is a huge change for the financial markets. <\/p>\n\n\n\n

JIBAR was based on survey estimates and was subject to manipulation. ZARONIA, on the other hand, is anchored on actual market transactions. <\/p>\n\n\n\n

ZARONIA is thus seen as a more reliable and transparent risk-free reference rate (RFR), which is why the South African Reserve Bank (SARB) decided to move to the new reference rate. <\/p>\n\n\n\n

The move aligns with global benchmark reform programmes that have already been completed or are underway in many markets. <\/p>\n\n\n\n

Elenjical Solutions said that it simplifies hedging strategies and cross-border operations for institutions with international exposure.<\/p>\n\n\n\n

It added that the transition also creates a practical impetus for modernisation, with institutions that adopt ZARONIA needing to update pricing models, contract systems and transaction processing systems. <\/p>\n\n\n\n

A few months left<\/h2>\n\n\n
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The shift to ZARONIA is currently underway, the JIBAR trades ceasing in May 2026, and full cessation is mandated by December<\/p>\n\n\n\n

Elenjical said that some recent transactions signal that the transition has entered its decisive phase. <\/p>\n\n\n\n

This includes RMB arranging South Africa’s first JSE-listed corporate bond linked to ZARONIA for Super Group Limited, giving the market its first live pricing reference for future issuances. <\/p>\n\n\n\n

Standard Bank then became the first South African bank to issue Flac notes, raising over R2 billion, and the first to offer floating rate notes linked to ZARONIA in a public auction.<\/p>\n\n\n\n

“These deals demonstrate that early movers are not simply complying \u2014 they are helping build the reference infrastructure the whole market will rely on,”\u00a0says Alisha D’sa, Senior Consultant at Elenjical <\/p>\n\n\n\n

“The Super Group transaction established a pricing reference that provides clarity and confidence as ZARONIA adoption accelerates.”<\/p>\n\n\n\n

That said, operational and legal risks still remain regarding the transition. D’sa said that operational complexity should not be underestimated. <\/p>\n\n\n\n

“The most pressing risk is disruption – the transition requires a complete overhaul of existing systems, renegotiation of legacy contracts and updates to pricing models across portfolios,”\u00a0she said.<\/p>\n\n\n\n

She added that financial instruments must ensure that systems can accurately price and capture ZARONIA-linked instruments. <\/p>\n\n\n\n

Institutions will also need to work through the legal processes required to renegotiate contracts and embed robust fallback clauses. <\/p>\n\n\n\n

“The scale of that contractual work means businesses that have not yet maintained pace will face mounting pressure in the months ahead,” said Elenjical. <\/p>\n\n\n\n

“Regulatory alignment with SARB guidelines is non-negotiable. The clear December 2026 deadline for full JIBAR cessation leaves little room for delay in institutions still mid-transition.” <\/p>\n\n\n\n

For those still in the transition, they will need to prioritise end-to-end testing of procedures and controls for ZARONIA-based instruments.<\/p>\n\n\n\n

Institutions that have moved early have now accumulated practical experience with ZARONIA pricing and execution that latecomers will need to develop under greater time pressure. <\/p>\n","protected":false},"excerpt":{"rendered":"

The switch from JIBAR to ZARONIA is one of the biggest structural shifts for th South Africa’s capital markets.<\/p>\n","protected":false},"author":95,"featured_media":862722,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[25557,2924],"class_list":["post-862706","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-elenjical-solutions","tag-reserve-bank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862706","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=862706"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862706\/revisions"}],"predecessor-version":[{"id":862994,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862706\/revisions\/862994"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/862722"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=862706"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=862706"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=862706"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}