Asia Index launches index to track performance of CBLO rate

New index is designed to measure the returns from a daily rolling deposit at the CBLO rate

Asia Index, a joint-venture between S&P Dow Jones Indices and BSE, on Tuesday launched a new index to measure the performance of Collateralised Borrowing and Lending Obligation (CBLO) rate – one of most liquid rates in the country – over a period of time.

The new index – S&P BSE Liquid Rate Index – can be used to create exchange traded funds for both retail and institutional investors.

The index is designed to measure the returns from a daily rolling deposit at the CBLO rate, Asia Index said in a statement.

"As the Indian fixed income market is maturing, investors are seeking a tool to measure the performance of CBLO rates over a period of time," Asia Index CEO Alka Banerjee said.

"With the launch of S&P BSE Liquid Rate Index, we are expanding our fixed income indices offering in the most actively traded instrument in the money market. The CBLO rate is considered one of most liquid rates in India, in the overnight segment," Banerjee said.

The new index would be calculated using the CBLO rate for transactions maturing on the following business day and with settlement T+0.

Rates used would be provided by the Clearing Corporation of India Ltd (CCIL).

The S&P BSE CBLO Index is calculated only on those days when both BSE and CCIL are open.