Sterling Overnight Interbank Average Rate (SONIA)

What is Sterling Overnight Interbank Average Rate (SONIA)?

Sterling Overnight Interbank Average Rate (SONIA) meaning An index that tracks Sterling overnight funding rates for trades that occur in off hours. It is the rate that underpins the calculation of an interest rate curve used for discounting sterling OTC derivatives that are transacted under ‘clean CSAs’. It is also the required rate of interest to be paid to counterparties on any cash received as collateral to support derivative positions.

 

reference: mercer.com