Saying goodbye to the Johannesburg Interbank Average Rate
The South African Reserve Bank (SARB) has confirmed that the Johannesburg Interbank Average Rate (Jibar) will be permanently discontinued after its final publication on 31 December 2026, bringing the country’s benchmark interest rate reform into its final execution phase.
In a media release early December 2025, the SARB stated that “all Jibar tenors (durations) will cease to be provided and will be considered non-representative as of that date”. Jibar is an interbank reference rate used to price bonds, derivatives and other interest-rate-linked instruments in South Africa, and has historically featured in banks’ funding and pricing frameworks.
It represents the average rate at which banks are prepared to lend unsecured funds to one another for specific durations. Over time, the interbank activity that supported the calculation of these term rates declined, leaving Jibar reliant on banks’ stated borrowing rates rather than rates derived from actual transactions.
The end of the Jibar era
“The benchmark’s structural weaknesses, together with the sustained decline in the market underpinning it, have created vulnerabilities that cannot be resolved in the foreseeable future,” the SARB wrote, explaining the rationale behind the move. On the central bank’s assessment, these shortcomings could not be remedied through administrative, governance or methodological measures.
The South African experience mirrors developments in other major financial markets. A useful comparator is the London Interbank Offered Rate, or LIBOR, which was phased out globally between 2021 and 2023. LIBOR, like Jibar, was a forward-looking term rate that was forced to rely on bank submissions rather than transaction volumes. As the underlying markets thinned, regulators concluded that LIBOR could no longer serve as a credible benchmark, leading to its replacement by overnight, transaction-based rates.
FAnews readers may recall the LIBOR rate-fixing scandal that emerged in the aftermath of the 2008-2009 Global Financial Crisis and culminated in a series of regulatory investigations from 2010 onwards. Between 2012 and 2015, the UK’s Financial Conduct Authority and its predecessor, the Financial Services Authority, imposed substantial fines on major international banks after finding that LIBOR submissions had been manipulated to benefit trading positions or to conceal funding stress. The conclusion: benchmarks reliant on judgement rather than market action are vulnerable to manipulation, even under close regulatory supervision.
Introducing Zaronia
The South African Rand Overnight Index Average, or Zaronia, was already designated as Jibar’s successor in 2022 following work by the SARB and the Market Practitioners Group (MPG). The December 2025 announcement confirms that this new designation is binding. Zaronia differs from Jibar in several important respects. Jibar is a forward-looking term rate, while Zaronia is an overnight rate calculated from actual unsecured rand funding transactions and published on a backward-looking basis as a trimmed, volume-weighted average. The SARB reiterated that the new rate is “based on actual transactions” to improve benchmark robustness.
The shift from a term rate to an overnight, backward-looking benchmark carries operational consequences, particularly around the timing of interest rate determination. At first glance, this change could have an impact on retail banks, especially in the home loans segment. In practice South African home loans are priced off the banks’ prime lending rate, which in turn tracks the SARB’s repo rate, rather than Jibar. Benchmark reform, in and of itself, should not influence repo or prime rate decisions and cannot be viewed as a threat to household affordability.
Even so, Jibar has featured in mortgage markets at the funding and pricing-mechanism level, even where borrowers experience their loans as prime-linked. In these cases, the cessation of Jibar matters to lenders’ internal pricing, hedging and funding structures rather than to the client’s quoted margin. This explains why the SARB urged market participants to “accelerate their transition efforts and make sure that all relevant financial contracts incorporate appropriate fallback provisions.”
Keeping your clients in the loop
The good news for financial advisers is that you will not be called upon to explain mortgage rate changes consequent to the benchmark transition. You may, however, have to assist with how your clients interpret the change when new benchmark terminology appears in bank communications, loan terms or media coverage. Should you be asked, you can tell clients that their prime-linked home loan instalments remain driven by the banks’ prime lending rate and are not linked to Jibar or Zaronia. The latter are used by banks in wholesale funding and interest rate risk management rather than in retail mortgage pricing.
Institutional market participants have been vocal about the new benchmark. STANLIB Asset Management, one of South Africa’s largest fixed income managers, has publicly shared its involvement in trading pioneering Zaronia-linked instruments and is assessing the valuation impact of converting legacy Jibar exposures. Midway through 2025, the development of a Zaronia yield curve was still in progress, and risk management approaches at asset managers were evolving accordingly.
How banks are responding
Of the major banks, Standard Bank has published the most detailed public material on the transition, including definitions of Jibar and Zaronia, discussion of adjustment spreads and confirmation that certain Jibar-linked lending products fall within the scope of the reform. This material is framed as client education rather than promotion and reflects the bank’s involvement in market-wide benchmark reform initiatives.
Public, retail-facing commentary from Absa and FNB remains limited at this stage, with communication largely occurring through institutional channels and direct client engagement. Advisers cannot assume there will be consistent messaging across lenders and should verify how individual banks are addressing legacy contracts, fallback provisions and disclosure obligations. Importantly, the transition itself should not alter the interest rate attached to clients’ existing loan products, particularly where those loans are priced off prime.
No room for complacency
The SARB has been explicit that Jibar will remain representative until the end of 2026, noting that the announcement “does not suggest that Jibar will become unrepresentative before this date”. At the same time, the central bank confirmed that the old metric will be “permanently discontinued immediately after its final publication on 31 December 2026”. This gives all stakeholders a clear timeline to make the necessary adjustments.
Advisers can frame the end of the Johannesburg Interbank Average Rate as a structural reform intended to strengthen benchmark integrity. Clients need to understand that Jibar will cease to exist, that Zaronia operates on a different basis, and that mortgages and other retail loan products will not be materially affected. As with LIBOR before it, the benchmark’s demise does not alter the economic activity it once reflected.
Writer’s thoughts:
Not every financial market reform alters client outcomes, but all of them test how well advisers understand the system. Is the Jibar-to-Zaronia benchmark transition relevant to your clients? Please comment below, interact with us on X at @fanews_online or email us your thoughts [email protected].
