New Measures to Support the Development of Hong Kong’s Fixed Income and Currency Market and Offshore RMB Business

The Hong Kong Monetary Authority (HKMA), the People’s Bank of China (PBoC) and the Securities and Futures Commission (SFC) announced today (7 July) a series of new measures to deepen the financial cooperation between Hong Kong and the Chinese Mainland, support the development of Hong Kong’s fixed income and currency (FIC) market and offshore RMB business, and reinforce Hong Kong’s position as an international financial centre. These measures include:

1. Supporting the collaboration of financial infrastructure institutions in Hong Kong and Chinese Mainland to develop a Hong Kong FIC electronic trading platform;
2. Further enhancing and expanding the Southbound Bond Connect, including increasing the annual investment quota, developing bond repurchase (repo) business using Southbound Bond Connect bonds as collateral, expanding the product scope to cover products with HKD bonds and RMB bonds as underlying assets, connecting to the Macao bond market, and enhancing the management of Southbound Bond Connect market makers;
3. Supporting the inclusion of onshore bonds issued by the Ministry of Finance and Mainland policy banks that are held under Northbound Bond Connect as eligible margin collateral at the HKFE Clearing Corporation and the SEHK Options Clearing House;
4. Enhancing the Northbound Bond Connect operational arrangement to extend the settlement time and improve efficiency;
5. Further enhancing the Swap Connect to include the interbank 7-Day Fixing Depository-Institutions Repo Rate (FDR007) as a reference rate; and
6. Supporting the launch of Hong Kong Exchanges and Clearing Limited 5-Year China Government Bond Futures in Hong Kong on 3 August.

Building on this, the HKMA also announced five measures to support the development of the offshore RMB market and strengthen Hong Kong’s role as a leading offshore RMB business hub, thereby enabling greater outreach to other regions and enhancing support for the real economy. These measures, underpinned by strong support from the PBoC, address industry suggestions for developing the offshore RMB market. These include:

1. Increasing the size of the HKMA’s RMB Business Facility from RMB200 billion to RMB500 billion and extending tenors to include 9-month, 2-year and 3-year, effective on 10 July 2026;
2. Exploring to introduce a tendering mechanism of 7-day offshore RMB liquidity;
3. Exploring the issuance of offshore RMB short-term debt instruments to support the building of the offshore RMB yield curve;
4. Promoting the development of a bilateral currency transaction framework between Indonesian Rupiah and offshore RMB; and
5. Issuing good practices to banks to promote RMB adoption.

Mr Eddie Yue, Chief Executive of the HKMA, said, “We are pleased to announce this series of measures, which will further deepen cross-boundary financial cooperation, strengthen financial market connectivity between Hong Kong and the Chinese Mainland, promote the development of Hong Kong’s fixed income and currency market, and reinforce Hong Kong’s position as an offshore RMB business hub and international financial centre. These measures are the result of concerted efforts of the HKMA, the PBoC and other relevant financial regulatory authorities in Hong Kong and on the Chinese Mainland. We will continue to work closely with the relevant regulatory authorities, the industry and financial infrastructure institutions to ensure timely and smooth implementation of the measures, and explore further enhancements.”