Enhancements to offshore RMB bond repurchase business officially launched. 25 Aug 2025. At least 25 institutions conducted 60+ transactions amounting to over RMB3 billion. HKMA will continue promoting the business with Mainland authorities.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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The enhanced arrangements for offshore RMB bond repurchase (repo) business were officially launched on 25 August 2025 by the Hong Kong Monetary Authority ("HKMA") on 25 August 2025.
The enhancements support rehypothecation of bond collaterals and cross-currency repo, as announced by the HKMA in July 2025.
The trading in the newly enhanced arrangements has been orderly, with at least 25 financial institutions participating, including market makers, banks, securities firms, asset management companies, and hedge funds.
These institutions conducted over 60 transactions, amounting to an equivalent of more than RMB3 billion, in different settlement currencies such as RMB, HKD, USD, and EUR.
The bond collaterals can be reused during the repo period in the following specific use cases: (a) for reuse in offshore repo transactions; (b) as collateral for the HKMA’s RMB Liquidity Facility; (c) as margin collateral at OTC Clearing Hong Kong Limited ("OTCC"); and (d) for cash bond trading through Northbound Bond Connect.
The HKMA will continue to collaborate with Mainland authorities and the industry to promote offshore RMB repo business and create a more enabling environment for Hong Kong’s offshore RMB market.
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