NBG begins publishing reformed money market index

The National Bank of Georgia (NBG) will start publishing the reformed money market index - TIBR (Tbilisi Inter Bank Rate) from August 1, 2018, announces NBG.

Money market indices play a key role in the financial system, banking system and the economy. They are used for pricing different financial instruments such as: floating rate bonds, bank loans and derivatives. Money market interest rate benchmarks allow for better pricing transparency, risk allocation between market participants and interest rate risk management. As such, they support the development of more efficient and liquid markets and thereby a stronger and more resilient financial system”, read the press release published by NBG today.

Money market indices are widely used in the global financial system as benchmarks for a large volume and broad range of financial products and contracts. The reform of TIBR follows the global trend whereby in recent years domestic interest rate benchmarks have been undergoing fundamental reviews and reforms to improve their robustness, transparency and governance, whilst focusing on wider use of reformed overnight interest rate benchmarks (the so called ‘Risk Free Rates' or ‘RFRs') such as SONIA or EONIA.

The reformed TIBR methodology includes index calculation and publishing rules, as well as its control mechanisms. The methodology was introduced with the assistance of European Bank for Reconstruction and Development (EBRD) and in close partnership with market participants.