Bangladesh Bank is set to launch two new benchmark interest rate systems - Bangladesh Overnight Financing Rate (BOFR) and Dhaka Overnight Money Market Rate (DOMMR) - from 15 April, replacing traditional quote-based reference rates with transaction-driven indicators.
Officials said the new system is designed to improve transparency and better reflect actual market conditions by using real interbank transaction data instead of indicative rates provided by banks.
The central bank announced the development at a press briefing held at its headquarters in Dhaka, where officials from the Debt Management Department outlined the key features of the new framework.
Under the new structure, BOFR will function as a secured overnight reference rate, based on interbank repo transactions conducted through the Financial Market Infrastructure (FMI) platform. DOMMR, on the other hand, will reflect unsecured interbank money market transactions processed through the Electronic Dealing System (EDSMoney).
Initially, BOFR will be published for overnight and one-week tenors, while DOMMR will cover overnight, one-week, one-month and three-month maturities.
Bangladesh Bank officials said the move aligns the country’s financial system with global best practices, similar to internationally used benchmarks such as the Secured Overnight Financing Rate (SOFR).
They noted that the current Dhaka Interbank Offered Rate (DIBOR), introduced in 2010 and published by the Bangladesh Foreign Exchange Dealers Association (BAFEDA), does not always accurately reflect real market activity as it is based on quoted rather than executed rates.
The new BOFR and DOMMR systems will instead rely on a volume-weighted calculation method using actual transaction data. Statistical adjustments will also be applied to minimise distortions caused by unusual or outlier trades.
Officials further explained that BOFR calculations will require a minimum number of transactions over a three-day window, while DOMMR will be based on daily trading activity, with fallback mechanisms in place if data thresholds are not met.
Bangladesh Bank expects the new benchmarks to become key reference points for financial instruments such as loans, bonds and other floating-rate products. The system is also expected to enhance market credibility, improve pricing efficiency and attract greater foreign investment by strengthening transparency.
From 15 April onward, the new rates will be published daily on the Bangladesh Bank website each morning, providing banks, investors and businesses with a standardised indicator for pricing and risk assessment.
