The euro overnight index average, or Eonia, will be priced 8.5 basis points above the ECB's new €STR reference rate beginning Oct. 2, according to the central bank.

Eonia is set to be discontinued due to low volumes and will be replaced by €STR, Reuters noted.

To allow the use of Eonia in existing contracts for a limited period for a smooth transition, a private sector working group recommended in March that Eonia be calculated by applying a fixed spread to the €STR, instead of continuing to rely on the contributions of a panel of banks.

The European Money Market Institute, Eonia's administrator, has adopted the new methodology, which will take effect Oct. 2 until its discontinuation. The European Parliament in December 2018 approved an extension of the use of Eonia until the end of 2021.