RBI Amends Rules For Smoother Transition Away From Libor

The Reserve Bank of India said it would amend the guidelines related to export credit in foreign currency and restructuring of derivative contracts as it looks to ensure a smooth transition away from the London Interbank Offered Rate.

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The transition away from Libor began after it was found to have been manipulated for years. The Intercontinental Exchange, the authority responsible for Libor, said it will stop publishing one-week and two-month U.S. dollar Libor rates after Dec. 31, 2021, while rates for the remaining tenors will be discontinued after June 30, 2023.

While Libor is computed based on a poll of estimated borrowing rates and is a forward-looking rate, the alternative reference rates are backwards-looking based on actual transactions.

Read More: As Libor End Nears, Indian Lenders And Firms Have Many Hoops To Jump Through