Polish financial regulator says WIRD will replace WIBOR as interest rate benchmark

The logo of Polish regulator KNF is pictured on its headquarters in Warsaw April 7, 2015. REUTERS/Kacper Pempel

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GDANSK, Sept 2 (Reuters) – Polish financial regulator KNF said on Friday the steering committee of a national working group had chosen the Warsaw Deposits Market Index (WIRD) to replace the Warsaw Interbank Offered Rate ( WIBOR) as the reference interest rate used to calculate monthly loan payments.

The Polish government said in April that it would seek to replace the WIBOR interbank rate on which most mortgages are based by January 1, 2023, in addition to other borrower easing measures.

Rising interest rates have weighed on the household budgets of many Polish mortgage holders, whose payments increase with the WIBOR interbank rate.

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“The next step for (the National Working Group Steering Committee) will be to adopt a roadmap outlining the timeline for activities to replace the WIBOR repository with WIRD,” KNF said in a press release.

“Eventually, WIRD is to become the benchmark for key interest rates … used in financial agreements (i.e. loan agreements), financial instruments (i.e. securities or derivatives) and by investment funds (i.e. to set management fees),” he added.

WIRD uses data representing overnight (ON) transactions as input.

The working group includes representatives from the Polish Ministry of Finance, the central bank, KNF, the Warsaw Stock Exchange, major commercial banks and investment fund management companies, among others.

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Reporting by Karol Badohal; Editing by Mark Porter

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