The Johannesburg Interbank Average Rate (JIBAR), a key interest rate benchmark in South Africa, will be replaced by the South African Rand Overnight Index Average (ZARONIA), as designated by the Market Practitioner’s Group (MPG). This transition marks a significant change for financial markets, impacting various JIBAR-linked financial products, such as floating-rate loans, credit facilities, deposits, and derivatives, particularly those maturing after JIBAR’s cessation.

RMB, responding to the transition, has launched a South African Rates Reform Programme to assist clients. Central to this effort is RMB’s ZARONIA Calculator, designed to simplify the complex calculations associated with the new rate. This tool, available on RMB’s website, aims to ease market adoption of ZARONIA.

Kim Robertson of RMB noted that the South African Reserve Bank (SARB) endorsed ZARONIA as of November 2023, signalling its readiness for market use. She emphasised the need for corporates to review their current JIBAR-linked transactions, assess the potential impact of this transition, and familiarise themselves with ZARONIA to ensure business continuity.

RMB is also evaluating how its product offerings may need to evolve during this reform process. The bank is benchmarking its approach against international peers to align with global reference rate reforms.

Companies are advised to assess their exposure to JIBAR and other affected benchmarks while preparing for the operational and financial adjustments required for adopting ZARONIA, ensuring they stay ahead of this critical market transition.