Economics · Financial Markets and Reference Rates
Following the global cessation of the USD LIBOR, which transaction-based Alternative Reference Rate (ARR) benchmarked against the US Treasury Repo Market is widely used for transitioning legacy commercial loan contracts, and what adjustment is added to it?
- 1Repo Rate (RBI Policy Rate) with a cash reserve ratio adjustment.
- 2SOFR (Secured Overnight Financing Rate) with a Credit Spread Adjustment (CSA).✓
- 3Modified MIFOR (Modified Mumbai Interbank Forward Outright Rate) with no adjustment.
- 4MIBOR (Mumbai Interbank Offered Rate) with a country risk premium adjustment.
Correct answer
SOFR (Secured Overnight Financing Rate) with a Credit Spread Adjustment (CSA).
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