Transition from JIBAR to ZARONIA
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Individual Reform: Transition from JIBAR to ZARONIA 2026 - 2027

Move to new benchmark rate for money markets by phasing out JIBAR benchmark rate.

No data available for the deliverable: Move to new benchmark rate for money markets by phasing out JIBAR benchmark rate.

No data available for the deliverable: Move to new benchmark rate for money markets by phasing out JIBAR benchmark rate.

No data available for the deliverable: Move to new benchmark rate for money markets by phasing out JIBAR benchmark rate.

No data available for the deliverable: Move to new benchmark rate for money markets by phasing out JIBAR benchmark rate.

No data available for the deliverable: Move to new benchmark rate for money markets by phasing out JIBAR benchmark rate.

Summary

The reform involves a phased transition plan, industry consultation, with International Swaps and Derivatives Association (ISDA) fallback protocols and new conventions for cash market instruments, with JIBAR set to cease by December 2026.

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Is it working?

The transition is progressing, with strong regulatory support and industry engagement. Full completion is expected by the end of 2026. The reform is closely monitored, with regular updates and industry feedback.

Actions

The derivatives market is transitioning smoothly, but adoption in the cash market is slower. Legacy contract remediation and liquidity building are ongoing.

Are there plans?

The ISDA fallback protocol was launched in April 2025, cash market conventions published and regulatory exemptions granted for ZARONIA-linked instruments.

Is it on the agenda?

The transition is a top priority for the SARB, FSCA and Market Practitioners Group, with clear timelines and industry guidance.

Goals

To ensure a smooth transition from the JIBAR benchmark to ZARONIA, aligning with global best practice and reducing systemic risk.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) South African Reserve Bank (SARB)

Summary

The reform involves a phased transition plan, industry consultation, with International Swaps and Derivatives Association (ISDA) fallback protocols and new conventions for cash market instruments, with JIBAR set to cease by December 2026. This is a SARB-led phased migration from JIBAR to ZARONIA for money market benchmarks, daily rate now published and contracts migrating. ZARONIA replaces JIBAR, daily compounded rate publicly available; contracts, reporting - sector compliance is underway.
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Canvas not supported.

Is it working?

The transition is progressing, with strong regulatory support and industry engagement. Full completion is expected by the end of 2026. The reform is closely monitored, with regular updates and industry feedback.

Actions

The derivatives market is transitioning smoothly, but adoption in the cash market is slower. Legacy contract remediation and liquidity building are ongoing. Market adaptation is positive with the ongoing transition on schedule.

Are there plans?

The ISDA fallback protocol was launched in April 2025, cash market conventions published and regulatory exemptions granted for ZARONIA-linked instruments. There is ongoing migration, education, market communication and legacy contract management.
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Is it on the agenda?

The transition is a top priority for the SARB, FSCA and Market Practitioners Group, with clear timelines and industry guidance and is part of SARB Financial Markets oversight, sector annual plans as well as Cabinet briefings.

Goals

To ensure a smooth transition from the JIBAR benchmark to ZARONIA, aligning with global best practice and reducing systemic risk.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) South African Reserve Bank (SARB)

Summary

Deliverables include: (i) publication of a JIBAR fallback methodology recommending that fallback rates equal compounded ZARONIA plus a CAS based on the five‑year historical median JIBAR–ZARONIA spread; (ii) a JIBAR Transition Plan and “ZARONIA First” guidance covering derivatives and cash markets, including milestones for infrastructure readiness and conventions; (iii) adoption of ZARONIA‑linked products in derivatives and cash markets (loans, bonds, MMIs); and (iv) MPG recommendations for a retail‑market transition, including treatment of mortgages and other JIBAR‑linked retail credit.

Canvas not supported.

Is it working?

South Africa has made substantial progress: ZARONIA is live and used in derivatives and cash products; fallback and CAS methodologies are agreed; and transition plans for wholesale and retail markets are in place. The remaining challenges are ensuring timely active transition of legacy JIBAR contracts, handling “tough legacy” positions (which may require legislation or regulatory intervention) and managing the pricing, valuation and systems implications for banks and customers, particularly in retail products where understanding of the new benchmark is low.

Actions

Actions already taken: (i) SARB and the MPG have published the ZARONIA methodology and policies, confirming ZARONIA as the preferred successor rate; (ii) the MPG has issued a final JIBAR Fallback Methodology recommendation, specifying compounded ZARONIA plus CAS, aligned with ISDA global conventions; (iii) a JIBAR Transition Plan – milestones update (August 2025) outlines phases for derivatives and cash markets and confirms that market infrastructure is ready for ZARONIA‑based trading; (iv) the MPG’s Cash‑Market Workstream has recommended a ZARONIA‑based fallback for cash products and reported that, from May 2025, infrastructure supports ZARONIA in all cash instruments; and (v) in February 2026, the MPG published “Recommendations for a ZARONIA Transition in the Retail Market” covering retail credit, especially mortgages.

Are there plans?

Planned steps include: (i) formal announcement of JIBAR cessation (expected in 2025), followed by final publication / cessation by end‑2026; (ii) continued rollout of the “ZARONIA First” initiative, encouraging new derivatives and cash products to reference ZARONIA rather than JIBAR; (iii) legislative or regulatory solutions for “tough legacy” contracts that cannot be practically amended before cessation; and (iv) further MPG work on term‑rate options and detailed guidance for retail‑credit markets, including recommendations for mortgages and other JIBAR‑linked retail loans.
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Is it on the agenda?

The transition is a key part of SARB’s benchmark‑reform and financial‑market‑development agenda, overseen through the MPG. SARB communications emphasise that moving from quote‑based JIBAR to transaction‑based ZARONIA aligns South African markets with IOSCO benchmark principles and post‑LIBOR reforms. Budget and market commentary link benchmark reform to broader objectives of transparency, integrity and resilience in local financial markets.

Goals

To replace the Johannesburg Interbank Average Rate (JIBAR) with the South African Rand Overnight Index Average (ZARONIA) as the main interest‑rate benchmark, and implement robust fallback and transition arrangements across cash and derivatives markets to reduce benchmark‑manipulation risk and align with global near risk‑free rate reforms.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) South African Reserve Bank (SARB)

Summary

Deliverables include: (i) publication of a JIBAR fallback methodology recommending that fallback rates equal compounded ZARONIA plus a CAS based on the five‑year historical median JIBAR–ZARONIA spread; (ii) a JIBAR Transition Plan and “ZARONIA First” guidance covering derivatives and cash markets, including milestones for infrastructure readiness and conventions; (iii) adoption of ZARONIA‑linked products in derivatives and cash markets (loans, bonds, MMIs); and (iv) MPG recommendations for a retail‑market transition, including treatment of mortgages and other JIBAR‑linked retail credit.

Canvas not supported.

Is it working?

South Africa has made substantial progress: ZARONIA is live and used in derivatives and cash products; fallback and CAS methodologies are agreed; and transition plans for wholesale and retail markets are in place. The remaining challenges are ensuring timely active transition of legacy JIBAR contracts, handling “tough legacy” positions (which may require legislation or regulatory intervention) and managing the pricing, valuation and systems implications for banks and customers, particularly in retail products where understanding of the new benchmark is low.

Actions

Actions already taken: (i) SARB and the MPG have published the ZARONIA methodology and policies, confirming ZARONIA as the preferred successor rate; (ii) the MPG has issued a final JIBAR Fallback Methodology recommendation, specifying compounded ZARONIA plus CAS, aligned with ISDA global conventions; (iii) a JIBAR Transition Plan – milestones update (August 2025) outlines phases for derivatives and cash markets and confirms that market infrastructure is ready for ZARONIA‑based trading; (iv) the MPG’s Cash‑Market Workstream has recommended a ZARONIA‑based fallback for cash products and reported that, from May 2025, infrastructure supports ZARONIA in all cash instruments; and (v) in February 2026, the MPG published “Recommendations for a ZARONIA Transition in the Retail Market” covering retail credit, especially mortgages.

Are there plans?

Planned steps include: (i) formal announcement of JIBAR cessation (expected in 2025), followed by final publication / cessation by end‑2026; (ii) continued rollout of the “ZARONIA First” initiative, encouraging new derivatives and cash products to reference ZARONIA rather than JIBAR; (iii) legislative or regulatory solutions for “tough legacy” contracts that cannot be practically amended before cessation; and (iv) further MPG work on term‑rate options and detailed guidance for retail‑credit markets, including recommendations for mortgages and other JIBAR‑linked retail loans.
rn

Is it on the agenda?

The transition is a key part of SARB’s benchmark‑reform and financial‑market‑development agenda, overseen through the MPG. SARB communications emphasise that moving from quote‑based JIBAR to transaction‑based ZARONIA aligns South African markets with IOSCO benchmark principles and post‑LIBOR reforms. Budget and market commentary link benchmark reform to broader objectives of transparency, integrity and resilience in local financial markets.

Goals

To replace the Johannesburg Interbank Average Rate (JIBAR) with the South African Rand Overnight Index Average (ZARONIA) as the main interest‑rate benchmark, and implement robust fallback and transition arrangements across cash and derivatives markets to reduce benchmark‑manipulation risk and align with global near risk‑free rate reforms.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) South African Reserve Bank (SARB)

Analyst: Tinashe Kambadza
Status: in-progress
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