UAE - Mubasher: The Central Bank of the UAE (CBUAE) will launch a new index for actual UAE Dirham-denominated overnight funding transactions, DONIA, from 7 December, the Emirates News Agency (WAM) reported.

The new index, which is part of the new Dirham Monetary Framework implementation plan, aims to offer market participants data related to the overall state of the actual interbank market and improve transparency in domestic money market activities.

DONIA is computed as a volume-weighted money market rate for all actual overnight secured and unsecured funding transactions of AED 10 million or more contracted by all banks operating in the UAE, registered through the UAE Funds Transfer System (UAEFTS).

Through the index, the CBUAE seeks to enable banks to determine factors relevant to their daily fixing of interbank rates (EIBOR) and enhance monetary policy transmission in the country.

The Governor of the CBUAE, Khaled Mohamed Balama, commented: "We, at the CBUAE, are confident that the publication of this new reference rate will not only provide additional transparency to the Dirham money markets, but also help the CBUAE in ensuring overnight money market rates are aligned to prevailing Base Rate."