In opening remarks at the Market Practitioners Group Conference, South African Reserve Bank Deputy Governor Rashad Cassim outlined next steps in the transition from Jibar to ZARONIA, including plans with the Financial Sector Conduct Authority to issue regulations in the second quarter of 2026 limiting new Jibar exposures. Jibar will be discontinued from 31 December 2026, with all tenors ceasing to be provided or representative immediately afterwards, and the authorities indicated they will consider exceptions so the prohibition does not impede risk management or create unintended market impacts. Cassim reported that ZARONIA adoption has increased from ZAR 6.4 billion to more than ZAR 200 billion since the launch of the ZARONIA First initiative, although Jibar exposures remain much larger, estimated at ZAR 43 trillion domestically and more than ZAR 107 trillion offshore as of mid-2025. The Market Practitioners Group has adopted methodologies for credit adjustment spreads and recommended Jibar fallback rates based on compounded ZARONIA, and the pre-cessation communication is expected to crystallise credit adjustment spread calculations even though application would only begin after 31 December 2026. To address legacy contracts that cannot readily be amended, the South African Reserve Bank and the Financial Sector Conduct Authority have proposed amendments to the Financial Sector Regulation Act to give the Reserve Bank powers to designate replacement benchmarks and determine adjustment spreads, including the possible use of a synthetic Jibar, and SARB plans to consult on the use of these powers once draft amendments are published. Work is also under way to appoint a benchmark administrator to publish forward-looking term ZARONIA rates by April 2026.

Original source View in tracker