South African Reserve Bank

South Africa’s financial landscape is set for a major shake-up as the South African Reserve Bank (SARB) has officially announced the end of the Johannesburg Interbank Average Rate (Jibar). This long-standing benchmark, in use for nearly 30 years, will be permanently discontinued right after its final publication on 31 December 2026. The move paves the way for a switch to the South African Rand Overnight Index Average (ZARONIA), a more reliable and transparent rate. Deputy Governor Rashad Cassim made the announcement at the 2025 Market Practitioners Group (MPG) Conference in Johannesburg on 3 December 2025, calling it the biggest reform in the country’s financial markets in decades. This step follows years of planning to fix weaknesses in the old system and align with global standards.
The decision comes amid growing concerns over outdated benchmarks worldwide, much like the phase-out of LIBOR in other countries. For South Africans, this could mean changes to loans, investments, and other financial products tied to interest rates. While everyday consumers might not feel the pinch directly, businesses and banks will need to adapt to avoid disruptions. The SARB is urging everyone in the market to start using ZARONIA now to make the switch smoother.
Background on Jibar and the Need for Change
Jibar has been a key player in South Africa’s financial world since 1999. It acts as an average interest rate that banks use when lending money to each other short-term, without any security. This rate underpins a huge number of financial deals, from loans and mortgages to complex derivatives and bonds. At its peak, contracts linked to Jibar were worth trillions of rands, with about 91% of exposure in the three-month Jibar rate, mainly in derivatives. However, the rate relies on quotes from a small group of banks rather than real deals, which has raised questions about its accuracy and openness.
Over time, experts spotted key flaws in Jibar. It is forward-looking, based on predictions of future rates, and draws from low volumes of actual trades—like just R10 billion in three-month negotiable certificates of deposit (NCDs). This makes it less reliable and open to issues, similar to problems that led to the global scrapping of rates like LIBOR after scandals. In response, the SARB kicked off talks on better options back in 2017 with a consultation paper on alternative benchmarks. Working with the MPG—a group of experts from banks, non-banks, and other sectors—they picked ZARONIA as the replacement.
ZARONIA flips the script by being backward-looking and based on real overnight lending deals between banks. It tracks actual unsecured call deposits, making it near risk-free and closely tied to the SARB’s repo rate. After a year-long test run ending in November 2023, ZARONIA is now published daily on the SARB website. This shift aims to boost trust, cut risks, and bring South Africa’s markets in line with international best practices from bodies like IOSCO.
Details of the Official Announcement
The big reveal happened at the 2025 MPG Conference, where Deputy Governor Rashad Cassim laid out the plan. “It has been eight years to reach this point, starting with the Reserve Bank consultation paper on alternative interest rate benchmarks. As someone who has been chairing the market practitioners’ group, I was overwhelmed with the expertise in the country, with the banks, with the non-banks in the financial sector,” Cassim said.
He confirmed Jibar’s last run on 31 December 2026, after which it stops for good. The announcement triggers fallback rules in existing contracts, locking in credit adjustment spreads right away—but these only kick in after the cutoff date, as Jibar stays usable until then. Cassim stressed a gradual rollout to avoid chaos, urging market players to ditch Jibar for ZARONIA in new deals straight away.
The conference itself focused on this reform, with talks on risks and next steps. It brought together stakeholders to hash out details, building on updates from August 2025 that flagged the coming cessation.
Reasons Behind the Jibar Cessation
The push to drop Jibar stems from its built-in weaknesses. Unlike ZARONIA, which uses real transaction data for transparency, Jibar depends on bank estimates that might not reflect true market conditions. This setup has sparked worries about manipulation and unreliability, echoing global issues with similar rates.
The SARB and MPG want a benchmark that is sturdy, based on high-volume trades, and less prone to errors. ZARONIA fits the bill by mirroring actual overnight funding costs, making it a better gauge for policy rates. The change also helps South Africa keep up with worldwide shifts, where countries have swapped risky benchmarks for safer ones like SONIA in the UK or SOFR in the US.
Cassim noted that while Jibar is not broken yet, the low trade volumes behind it—especially for the three-month rate—call for a upgrade. “We clearly need a better benchmark, and that is why we are committed to the Jibar cessation,” he explained in earlier remarks.
Timelines for the Transition
The roadmap is clear but tight. The formal announcement on 3 December 2025 kicks off the final phase. From now, the SARB encourages switching to ZARONIA in all new contracts to shrink the pile of deals needing fixes later.
Come the second quarter of 2026—around March—the SARB and Financial Sector Conduct Authority (FSCA) plan to roll out rules banning or limiting new Jibar-linked exposures. This “no new Jibar transactions” directive will force the market to adapt fast.
By end-2026, Jibar wraps up with its last publication on 31 December. All leftover contracts must shift to ZARONIA or other approved rates. ZARONIA has been ready since April 2025, giving plenty of time for testing.
For existing deals ending before 2027, no changes are needed. But those running longer will auto-switch, often with a credit adjustment spread to keep things fair.
Impacts on Financial Markets and Economy
This reform will ripple through banks, businesses, and investors. Jibar touches everything from home loans and corporate debt to derivatives and valuations. The switch could tweak interest calculations, affecting budgets and profits if not handled right.
Legacy contracts—old deals hard to update—pose the biggest headache. Cassim highlighted this risk after chatting with MPG members. Without smooth fallbacks, there could be disputes or higher costs. To tackle this, the SARB and FSCA are pushing changes to the Financial Sector Regulation Act. These would let the SARB pick replacement rates and set adjustment spreads, easing the move for stuck contracts.
On the plus side, ZARONIA brings more stability and clarity, cutting risks in the system. Banks like Standard Bank, RMB, and others are gearing up, reviewing products and offering help to clients. For wholesale banking—big company deals—the impact is bigger, but regular folks with standard loans might see little change.
If mishandled, though, it could spike costs or spark legal tussles. Projections warn of broader market effects, like shifts in fixed income trading or hedging strategies. Overall, the goal is a stronger, more trustworthy financial setup that boosts confidence and growth.
Path Forward and Advice for Stakeholders
With just over a year left, the SARB is calling for action. Firms should scan their Jibar-tied deals, weigh the hits, and plan switches. “We are encouraging market participants to use Zaronia instead of Jibar in contracts, but around the second quarter of next year, we plan, along with the Financial Sector Conduct Authority (FSCA) to issue regulations limiting new Jibar exposures,” Cassim said.

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South African Reserve Bank

South African Reserve Bank Announces Jibar Cessation by End of 2026, Ushering in ZARONIA Era for Financial Markets

South African Reserve Bank

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