EXCLUSIVE UAE central bank working to replace interbank rates - sources | Reuters
The United Arab Emirates central bank is studying ways to replace the local interbank rate, three sources said, as it tries to catch up with global regulators who have called time on such benchmarks after banks' attempts to rig them.
The UAE is looking at potential replacements for EIBOR - the Emirates Interbank Offered Rate which is used to price financial instruments in the Gulf’s top financial centre - and has started consultations with commercial banks in recent weeks, said three sources familiar with the matter.
The London Interbank Offered Rate (Libor) and other similar "IBOR" benchmark rates are based on quotes from banks on how much it would cost to borrow money from each other. These rates are used to calculate interest on several types of financial transactions such as bonds and loans.
Widespread use of such rates is meant to end by the end of this year and global regulators plan to replace them with alternative benchmarks after a global rate-rigging scandal that began to unfold about 10 years go.
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