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\u2019s new benchmark.<\/p>\n\n\n\n
South Africa\u2019s central bank is collaborating with the stock exchange\u2019s clearing house \u2014 LCH SwapClear \u2014 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.<\/p>\n\n\n\n
The London clearing house \u201cplans to convert all outstanding Jibar-linked derivatives contracts into Zaronia-linked instruments on 21 November,\u201d the central bank said in an emailed response to questions.<\/p>\n\n\n\n
\u201cThe conversion event follows LCH\u2019s discount curve switch in April 2026, and will convert existing Jibar-linked cleared contracts to reference a newly constructed Zaronia curve.\u201d<\/p>\n\n\n\n
The planned conversion is a key step in boosting Zaronia\u2019s adoption offshore, where market participants aren\u2019t bound by a South African directive that prohibits the creation of new Jibar-linked contracts and the transition has lagged the domestic market.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
The move to Zaronia mirrors shifts in the US and UK from measures like the London Interbank Offered Rate \u2014 once the most commonly used global reference rate \u2014 to more transparent and reliable benchmarks.<\/p>\n\n\n\n
Zaronia is based on actual transactions, making it comparable to the Euro Short-Term Rate and the Sterling Overnight Index Average.<\/p>\n","protected":false},"excerpt":{"rendered":"
South Africa has partnered with the London Stock Exchange to boost the offshore adoption of Zaronia.<\/p>\n","protected":false},"author":59,"featured_media":820199,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2088166998089863604","_sma_facebook_post_id":"191437357620492_2175723109914755","_sma_instagram_post_id":"18077343149346834","_sma_x_attempts":1,"footnotes":""},"categories":[11121],"tags":[20800,7152,20801],"class_list":["post-870222","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-jibar","tag-london-stock-exchange","tag-zaronia"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/870222","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\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=870222"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/870222\/revisions"}],"predecessor-version":[{"id":870232,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/870222\/revisions\/870232"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/820199"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=870222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=870222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=870222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}