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ICICI Bank on Thursday said it has executed its first interbank-money market transaction linked with Secured Overnight Funding Rate (SOFR) through its Hong Kong branch.
This transaction is part of the bank’s Benchmark Transition Management plan to assess the preparedness towards a smooth transition to the new Alternative Reference Rates (ARRs), the Bank said in a statement.
SOFR has been identified as the replacement for USD (US Dollar) LIBOR (London Interbank Offered Rate).
Globally, there is a move to migrate from LIBOR to transactions linked to ARRs and it is expected that fresh transactions after December 2021 would not be referenced to LIBOR, the Bank said.
Sriram H. Iyer, Head-International Banking, ICICI Bank said, with these transactions, we are working towards building internal capabilities to transition to the new ARRs in line with various regulatory timelines.
Prasanna, Group Head - Global Markets, Sales, Trading and Research, ICICI Bank, said: "Transition from LIBOR to ARR is a critical event in financial markets...the transaction is part of the transition initiatives by the Bank.”
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