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    Question

    The RBI will develop a new interest rate benchmark based

    on secured money markets. Which of the following is the proposed new benchmark rate?  
    A Secured Overnight Financing Rate (SOFR) Correct Answer Incorrect Answer
    B Secured Overnight Funding Rate (SOFR) Correct Answer Incorrect Answer
    C Secured Overnight Rupee Rate (SORR) Correct Answer Incorrect Answer
    D Secured Overnight Repo Rate (SORR) Correct Answer Incorrect Answer
    E Secured Overnight Interbank Rate (SOIR) Correct Answer Incorrect Answer

    Solution

    The Reserve Bank had set up the Committee on the MIBOR Benchmark (Chairperson: Shri Ramanathan Subramanian) to review the Rupee interest rate benchmarks in the country, especially the usage of Mumbai Interbank Outright Rate (MIBOR), and to examine the need for transition to new benchmarks. Based on the recommendations, it is proposed to develop a benchmark based on the secured money markets (both basket repo and TREP) – the Secured Overnight Rupee Rate (SORR).   

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