Daily Sterling Overnight Index Average (SONIA) Rate
IUDSOIA • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
4.22
Year-over-Year Change
-0.01%
Date Range
10/5/2021 - 8/4/2025
Summary
The Daily Sterling Overnight Index Average (SONIA) Rate is a key benchmark interest rate that reflects the average cost of unsecured overnight borrowing in the British financial markets. This rate is crucial for understanding short-term lending dynamics and serves as a fundamental indicator of financial market liquidity and monetary conditions.
Analysis & Context
This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.
Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.
About This Dataset
SONIA represents the weighted average of actual overnight sterling money market transactions executed in London by contributing banks. Economists and financial analysts use this rate as a critical reference point for pricing financial derivatives, assessing market sentiment, and understanding short-term funding costs.
Methodology
The rate is calculated daily by the Bank of England based on actual transaction data from eligible banks, using a volume-weighted trimmed mean approach.
Historical Context
Central banks and financial institutions use SONIA as a key reference rate for financial contracts, risk management, and monetary policy assessment.
Key Facts
- SONIA is the primary overnight interest rate benchmark for sterling markets
- The rate is calculated using actual transaction data from contributing banks
- It replaced LIBOR as the primary sterling reference rate in 2021
FAQs
Q: What does SONIA measure?
A: SONIA measures the average interest rate for unsecured overnight sterling transactions in the London financial markets. It reflects the actual borrowing costs between financial institutions.
Q: Why is SONIA important?
A: SONIA is crucial for pricing financial derivatives, assessing market liquidity, and providing a reliable benchmark for short-term lending rates. It serves as a key indicator of financial market conditions.
Q: How is SONIA calculated?
A: The rate is calculated using a volume-weighted trimmed mean of actual overnight sterling transactions from eligible banks. This ensures a representative and robust benchmark.
Q: When is SONIA used?
A: Financial institutions use SONIA for pricing loans, valuing derivatives, and managing short-term financial risks. It is particularly important in sterling-denominated financial contracts.
Q: How often is SONIA updated?
A: SONIA is calculated and published daily by the Bank of England, providing a current and dynamic representation of overnight lending rates.
Related News
S&P 500 Rises With Optimistic U.S. Inflation Report
S&P 500 Soars: Positive U.S. Inflation Developments The S&P 500, a primary stock index that tracks the performance of 500 major U.S. companies, has...
U.S. Stock Market Rises Amid PCE Inflation Report Analysis
U.S. Stock Market Climbs Amidst Insights from PCE Inflation Report Investors in the U.S. stock market are focusing on the most recent PCE Inflation...
U.S. Home Sales Decline In August Due To High Prices
August 2023 U.S. Home Sales Decline Amid Rising Mortgage Rates and High Prices In August 2023, U.S. home sales experienced a notable decline, highl...
Gen Z In the U.S. Shifts From Spending To Saving Habits
How Gen Z's Shift from Spending to Saving is Impacting the US Economy Recent trends indicate a significant shift in the spending habits of Gen Z, w...
U.S. Stock Market Futures Rise On Inflation and Tariff News
US Stock Market Futures Rise Amid Inflation Data and Tariff News US stock market futures are on the rise, driven by significant updates in inflatio...
U.S. Treasury Yields Decline After Inflation Data Meet Expectations
US Treasury Yields Drop as Inflation Data Meets Expectations US Treasury yields have seen a noticeable decline recently, as the latest inflation da...
Related Trends
Daily Sterling Overnight Index Average (SONIA) Rate: 10th percentile
IUDZLS6
SONIA Compounded Index
IUDZOS2
Daily Sterling Overnight Index Average (SONIA) Rate: 25th percentile
IUDZLS7
Daily Sterling Overnight Index Average (SONIA) Rate Total Nominal Value
IUDZLT2
Daily Sterling Overnight Index Average (SONIA) Rate: 90th percentile
IUDZLS9
Daily Sterling Overnight Index Average (SONIA) Rate: 75th percentile
IUDZLS8
Citation
U.S. Federal Reserve, Daily Sterling Overnight Index Average (SONIA) Rate [IUDSOIA], retrieved from FRED.
Last Checked: 8/1/2025