Canadian Overnight Repo Rate Average (CORRA)

What is CORRA?

The Canadian Overnight Repo Rate Average (CORRA) is Canada’s primary risk-free interest rate benchmark. It reflects the cost of overnight borrowing through repurchase agreements (repos) secured by Government of Canada securities. 

In June 2024, CORRA officially replaced the Canadian Dollar Offered Rate (CDOR) as Canada’s main reference rate for derivatives and other financial products. The transition from CDOR to CORRA marked a major milestone in Canada’s financial markets. 

This change aligns with a global trend toward using transaction-based risk-free rates, which help reduce credit risk and improve market transparency.

The Shift From CDOR to CORRA

Historically, financial products in Canada were priced using CDOR, which was based on rates submitted by banks, not on actual transactions. However, that approach opened the door to rate manipulation and limited transparency. 

Global regulators have since pushed for reference rates tied to real trades. This led to the development of CORRA, which was adopted in 2024 as Canada’s transaction-based, risk-free benchmark for financial instruments based on short-term borrowing costs, which are outlined in the table below.  

Who Uses CORRA?

A wide range of market participants use CORRA every day, including:

• Institutional investors to determine the fair value (or market price) of derivatives and fixed income products.
• Banks and lenders structuring new loans and managing the risk of changing interest rates.
• Corporations managing cash, making borrowing decisions, and issuing new debt.
• Pension funds and asset managers to calculate the value of investments that are sensitive to short-term interest rates.

What Benefits Does CORRA Provide?

Because CORRA reflects real market transactions, it offers clear benefits over historical benchmark rates. The table below outlines the main benefits of CORRA.

How CORRA is Calculated

The Bank of Canada calculates and publishes CORRA every business day, using data collected from the repo market.

Here’s a simple breakdown of how it works:

1. Data Source: CORRA is based on overnight repo transactions secured by Government of Canada bonds. These transactions are reported by multiple market participants, including banks and investment dealers.
2. Transaction Criteria: Only eligible repo trades are included, typically those that meet specific collateral and maturity requirements.
3. Calculation Method: The Bank of Canada calculates a volume-weighted average of all eligible transactions each day. This approach ensures that larger transactions have an appropriate impact on the final rate.
4. Publication Time: The official CORRA rate is published by the Bank of Canada on its website each business day by 9:00 a.m. ET for the previous day’s activity.

This calculation methodology ensures that CORRA reflects real market activity, making it a trusted reference point for pricing and risk management.

Common Misconceptions About CORRA

CORRA is still relatively new to many outside institutional finance, so it’s easy to confuse it with other types of interest rates or benchmarks. The table below highlights some of the most common misconceptions and explains how CORRA actually works.

Clearing up these misconceptions helps define CORRA’s role as a transaction-based benchmark used in Canada’s financial markets.

Why Finance Professionals Should Understand CORRA

Whether you work in capital markets, corporate finance, or risk management, understanding CORRA is essential as more Canadian financial instruments are now tied directly or indirectly to this benchmark.

Familiarity with CORRA can help you:

• Analyze pricing for fixed income and derivatives more accurately.
• Better assess interest rate risk in portfolios.
• Stay aligned with the regulatory and market shifts that shape modern finance.

This knowledge gives you the tools to apply practical insights in your role and stay current with financial markets.

CORRA and Other Benchmark Rates: Key Takeaways and Next Steps

Whether you work in capital markets, corporate finance, or risk management, understanding CORRA is essential to work confidently with Canadian dollar-denominated financial products. Benchmark rates like CORRA are part of the core knowledge required to analyze capital markets, evaluate derivatives transactions, and assess market risk.

As you deepen that knowledge, combining it with practical skills creates a strong foundation for you to make informed investment decisions and optimize returns in a complex global investment landscape. 

CFI’s expert-led, applied training prepares you for roles in capital markets. Our interactive, on-demand courses cover financial instruments, securities, markets, and analytical methodologies for managing risk and optimizing returns in today’s global financial environment. You’ll emerge prepared and confident to take on roles in capital markets and grow your career.

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Additional Resources

Secured Overnight Financing Rate (SOFR)

Sterling Overnight Interbank Average Rate (SONIA)

Interest Rate Derivatives (IRD)

See all Capital Markets resources