RBI Introduces Secured Overnight Rupee Rate (SORR) to Replace MIBOR
| Key Point | Details |
|---|---|
| Why in news | RBI proposes the Secured Overnight Rupee Rate (SORR) to replace MIBOR for better transparency. |
| Benchmark Name | Secured Overnight Rupee Rate (SORR). |
| Replaces | Mumbai Inter-Bank Offer Rate (MIBOR). |
| Developed by | Financial Benchmarks India Limited (FBIL). |
| Based on | Secured transactions like market repo and tri-party repo (TREPS). |
| Coverage | Represents 98% of overnight money market transactions, including both banks and non-banks. |
| Global Alignment | SORR aligns with Secured Overnight Financing Rate (SOFR), a global benchmark. |
| MIBOR Introduction Year | 1998. |
| Usage Purpose | Used as a benchmark for interest rate derivatives and hedging. |
| Committee Head | Ramanathan Subramanian, RBI Executive Director (MIBOR Committee). |
| Market Impact | Trade-based benchmark to enhance credibility and resist manipulation. |