Sonia’s share of sterling swaps tipped to hit 80% by year-end

Ahead of Monday’s convention switch, dealers already view Sonia as the primary sterling rate

As financial markets prepare to move away from Libor ahead of its likely demise at the end of 2021, traders predict the vast majority of sterling transactions will have switched to the alternative risk-free rate, Sonia, by the end of this year.

“My expectation is that by the end of this year 80% of all flow could be on Sonia. The Sonia market is now almost as liquid as Libor, so at some point there will be a shift in the interbank market where it will change from Libor as a default to Sonia,”