GCC Consulting

Enhancement Arrangements for the Offshore RMB Bond Repurchase Business announced by HKMA

On July 8, 2025, the Hong Kong Monetary Authority (HKMA) announced enhancements to the offshore RMB bond repurchase (repo) business to facilitate Northbound Bond Connect investors’ participation. Key improvements include allowing the rehypothecation of bond collateral during the repo period, aligning with international practices, which will enhance collateral efficiency and reduce financing costs. Additionally, the HKMA will support cross-currency repo transactions, enabling settlements in HKD, USD, and EUR, thereby enriching liquidity management tools for participating institutions. These enhancements aim to improve the operational efficiency of the offshore repo market and expand the use of onshore RMB bonds as collateral. The new arrangements will officially launch on August 25, 2025, and include provisions for eligible bonds, transaction arrangements, and data reporting requirements for market makers. The HKMA will continue to monitor market conditions and engage with industry stakeholders to support the sustainable development of offshore RMB business. Resources: https://www.hkma.gov.hk/eng/news-and-media/press-releases/2025/07/20250708-4/

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