New risk-free rate in Korea gets industry thumbs-up
Majority of 26-member benchmark panel back “credible” repo-based rate
Dealers have welcomed the selection of a repo-based risk-free rate for Korean won interest rate products, saying the new fixing is a suitable alternative to the current swaps benchmark, whose long-term future is uncertain.
“I feel that because Korean Treasury bond repos are actively traded in the market, the new benchmark is very credible,” says William Shek, head of the rates and debt team for Asia-Pacific at HSBC. “I think that played a big role in the risk-free rate decision.”
On February
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