SONIA is a well-established interest rate benchmark that has been published daily since 1997.

Sonia interest rate meaning. Click here to view the SONIA reform frequently asked questions FAQ document or download the attached PDF. The Sterling Overnight Index Average SONIA is a transaction-based index that has been administered by the Bank of England BOE since April 2016. SONIA is expected to replace GBP LIBOR across global financial markets by the end of 2021.

These FAQs which may be updated from time to time comprise information on the SONIA benchmark reforms and the derivatives industrys implementation of the relevant changes. The SONIA rate is based on actual overnight interest rates in active and liquid wholesale cash and derivative markets - making it more robust and less volatile than LIBOR. Ii Statement of methodology.

The Sterling Overnight Index Average SONIA is the effective overnight interest rate paid by banks for unsecured transactions in the British Sterling GBP or market. To calculate interest for for example a 3 month interest period the current practice is to use SONIA compounded in arrears Compounded SONIA over a period that starts before the interest period and finishes before the end of the interest period. As such it already had a well-developed interest rate swaps market for certain tenors and had been used on an admittedly small number of borrowing transactions prior to the Working Groups recommendation.

It is used for overnight. SONIA is the Sterling Overnight Index Average. As an overnight rate SONIA cannot be used directly as a floating rate for a multi-day interest period.

The Sterling Overnight Interbank Average rate SONIA is the effective overnight interest rate paid by banks for unsecured transactions in British sterling these are loans that are not backed by. Term SONIA refers to a forward-looking term reference rate based on overnight SONIA. SONIA may be referenced in a range of different contracts eg.

SONIA is an overnight interest rate. Compounded Daily SONIA means in relation to an Interest Period the rate of return of a daily compound interest investment with the daily Sterling overnight reference rate as reference rate for the calculation of interest and will be calculated by the Calculation Agent as follows and the resulting percentage will be rounded if necessary to the fourth decimal place with 000005 being rounded upwards. SONIA is based on actual transactions and reflects the average of the interest rates that banks pay to borrow sterling overnight from other financial institutions and other institutional investors.