In 2017, the Alternative Reference Rates Committee decided to replace the LIBOR rate with the overnight financing security rate SOFR. The SOFR rate was based on REPO transactions, where US Treasury bonds acted as collateral. Following Western trends, the methodology for calculating the identical repo rate in Kazakhstan TONIA was revised in 2019.

Today TONIA is the key weighted average rate of REPO operations in the money market. Moreover, the TONIA rate is a kind of benchmark for the NBRK, which allows the regulator to control the cost of funding in the short and medium term. Accordingly, TONIA at any point in time fairly reflects the value of money over a short period of one day.

No doubts that TONIA REPO transactions are an attractive way for investors to hedge interest rate risk. TPIB went further and implemented this tool in the capital markets.

A pilot deal was made in 2021 to issue debt securities with a coupon rate linked to TONIA in the amount of 12.5 billion tenges. The issuer was the Eurasian Bank for Reconstruction and Development (EBRD), whose rating is AAA, and its bonds are in the GS basket. TPIB acted as the exclusive underwriter for this issue.