SONIA stands for Sterling Overnight Index Average. It is a benchmark interest rate that reflects the average of the interest rates that banks pay to borrow sterling overnight from other financial institutions. SONIA is calculated by the Bank of England and is used as a reference rate for financial products such as interest rate swaps, floating-rate notes, and securitized products. SONIA was introduced in 1997 and is considered to be a reliable and transparent benchmark for the sterling money markets.