South Africa Taps London to Boost Offshore Adoption of New Benchmark Rate

South Africa is working with the London Stock Exchange to convert outstanding derivative contracts tied to a soon-to-be-abandoned rand reference rate into the country’s new benchmark rate. The update appears largely structural and is unlikely to be a major immediate market mover, but it can reduce future benchmark-transition risk for hedging counterparties.

Analysis

South Africa is working with the London Stock Exchange to convert outstanding derivative contracts tied to a soon-to-be-abandoned rand reference rate into the country’s new benchmark rate. The update appears largely structural and is unlikely to be a major immediate market mover, but it can reduce future benchmark-transition risk for hedging counterparties.