The end of an era: what JIBAR's demise means for South African finance

On 3 December 2025, the South African Reserve Bank (SARB) confirmed that the Johannesburg Interbank Average Rate (JIBAR) will be discontinued after its final publication on 31 December 2026. This long awaited announcement provides certainty to the South African market and allows participants to finalise transition strategies.

SARB’s announcement aligns with its previously communicated timelines. ZARONIA was named the preferred successor in 2022 with the Market Practitioners Group (MPG) providing recommended fallback language, market conventions and a detailed transition plan. The scale of this shift is immense, as of mid-2025, JIBAR exposures total R43 trillion domestically and over R107 trillion offshore, while ZARONIA adoption has surged from R6.4 billion to over R200 billion. SARB, MPG and the Financial Sector Conduct Authority (FSCA) are urging all market participants to accelerate their preparations, with a possible “no new JIBAR” directive expected by mid-2026. After cessation, all JIBAR tenors will be considered non-representative, triggering fallback provisions in agreements.

What does this mean?

The cessation of JIBAR marks a significant structural change in South Africa’s financial market. Trillions of rands in agreements, including loans, bonds and derivatives, will need to be rewritten to reference ZARONIA, a transaction based overnight benchmark aligned with the SARB policy. This shift moves the market away from predictable, forward looking term rates to retrospective calculations, impacting how interest is determined and introducing complexity for both lenders and borrowers. The transition is expected to be costly and operationally demanding, requiring updates to systems, processes and market infrastructure, similar to the global LIBOR transition.

Beyond operational challenges, the implications extend to valuations, risk models and legal frameworks. Swaps and derivatives may become misaligned without matching hedges, increasing exposure to volatility. Agreements lacking robust fallback provisions risk defaulting to less favorable rates, potentially leading to disputes. Retail consumers could also feel the impact, as products like home loans and credit cards may see changes in repayment amounts, fees and interest rates. Overall, the move to ZARONIA introduces widespread adjustments across financial institutions, investors and consumers, underscoring the scale and complexity of this benchmark transition.

Recommendations

To manage the transition from JIBAR to ZARONIA effectively, market participants should continue conducting comprehensive exposure analyses to identify all agreements, products and instruments referencing JIBAR. Once identified, these agreements should be amended ensuring that robust fallback provisions are in place to mitigate the risk of disputes. Updating systems and processes to accommodate ZARONIA’s calculation and reporting requirements is critical, as operational readiness will determine the smoothness of the transition.

In parallel, engaging legal and financial advisors to leverage MPG resources can help avoid litigation and ensure compliance with regulatory expectations. Accelerating transition audits will reduce the risk of a 2026 bottleneck, higher costs and competitive disadvantage. Finally, embracing market integrity by adopting best practices and aligning with international standards will not only safeguard compliance but also strengthen stakeholder confidence during this significant benchmark shift.

As the financial industry moves toward the discontinuation of JIBAR and the full implementation of ZARONIA, early preparation is essential. This transition brings significant legal, operational, and market complexities that require thorough planning and precise execution. If your organisation needs support, whether for developing transition strategies, revising agreements, managing consent processes or structuring new ZARONIA-linked issuances, our team is ready to provide assistance.