SONIA (Sterling Overnight Index Average) is a benchmark interest rate administered by the Bank of England. SONIA is based on actual transactions and reflects the average of the interest rates that banks pay to borrow sterling overnight from other financial institutions. SONIA is used as the reference benchmark rate for commercial loans.
Historically, Base Rate and SONIA have tracked one another closely, although there is no guarantee that the two rates may not de-couple in the future.
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