Consequently, the Official Sector Steering Group1, established under the auspices of the Financial Stability Board, recommended that interest rate benchmarks should be underpinned by transaction data and that risk-free interest rates benchmarks should be developed to support certain financial instruments, including derivative contracts.
This initiative was also informed by research conducted into the robustness, representativeness and sustainability of the Johannesburg Interbank Average Rate (JIBAR), given its wide usage as a reference rate in South Africa, especially the 3month JIBAR. The research indicated some shortcomings in JIBAR, which do not allow it to fully perform its role as a key indicator of underlying market conditions.