April 3, 2018 / 12:06 PM / 17 days ago

NY Fed publishes first SOFR rate at 1.80 pct

April 3 (Reuters) - The New York Federal Reserve on Tuesday published the Secured Overnight Financing Rate (SOFR) for the first time, a rate that regulators hope will over time be used in more derivatives contracts as an alternative to the London interbank offered rate (Libor).

The rate set at 1.80 percent. SOFR is based on the overnight Treasury repurchase agreement market, which trades around $800 billion in volume daily.

It will take time to develop liquidity in derivatives based on the rate. The CME Group will launch futures trades based on SOFR on May 7, while major dealers will enable swaps trading on the rate this year. [n L2N1RF1C1] (Reporting By Karen Brettell Editing by Chizu Nomiyama)

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