Financial institutions and companies are also under pressure to shift their commercial contracts pegged to the London Interbank Offered Rate (Libor) to alternative benchmarks ahead of the deadline. AdvertisementKenyan lenders have started transitioning their loans, deposits and borrowings whose interest rates are pegged on the expiring Libor. The proportion of external debt denominated in the US dollar was 67 percent translating to Ksh2.78 trillion ($20.37 billion) in the same period. He noted that many proposed replacements for Libor are country-specific and will not allow for easy comparison between investments across borders. This review seeks to replace existing interbank offered rates (IBORs) with alternative risk-free rates (ARRs) to improve market efficiency and mitigate systemic risk across financial markets.

Source: Daily Nation May 09, 2023 08:30 UTC