Wednesday July 9 2025
News Source: Global Exchanges
Focus: General - Global Exchanges
Type: General
Country: Hong Kong
On 8th July 2025, the Hong Kong Monetary Authority (HKMA) announced enhancements to the offshore RMB bond repurchase (repo) business, to facilitate the participation of Northbound Bond Connect investors in repo business. In particular, the enhancements include:
Supporting the rehypothecation of bond collaterals during the repo period:
The enhancement will facilitate more efficient use of collaterals, reduce the financing costs for market participants, and enhance the efficiency of liquidity management.
Supporting cross-currency repo (including HKD, USD and EUR):
At present, offshore RMB repo can only be settled in RMB. With the enhancement, settlement in other currencies (including HKD, USD and EUR) will be supported, with a view to facilitating participating institutions’ multi-currency funding activities by collateralising onshore RMB bond holdings, enriching their liquidity management tools, and hence increasing the attractiveness of onshore bonds.
These two enhancement measures aim to adopt international market best practices and enhance operational efficiency. They will further expand the depth and breadth of the offshore repo market, improve the market-based mechanism for offshore RMB liquidity management, and broaden the use of onshore RMB bonds as collateral in the offshore market.
The above arrangements will be officially launched on 25 August 2025.
Click on the above link for further information
