Hong Kong yuan facility to expand 150% to US$73.6 billion to meet international demand Hong Kong will substantially increase its yuan facilities for banks from this Friday, while the city will also introduce a new electronic fixed income and currency (FIC) trading system as part of its latest efforts to promote yuan trading, according to local market regulators on Tuesday. Hong Kong Monetary Authority (HKMA) would increase the quota of its RMB Business Facility for banks by 1.5 times to 500 billion yuan (US$73.6 billion) from this Friday, according to its chief executive Eddie Yue Wai-man. Yue said the increase was much-needed, as the current 200 billion yuan quota had been used up, and many banks said their international clients in 12 jurisdictions wanted yuan loans. “The expansion of the facilities would allow more banks to tap the yuan to lend to their clients in Hong Kong, Asean, the Middle East and Europe. This is very important in promoting the international usage of the yuan in real economy,” he said at a media briefing on Tuesday. The facility’s tenure would be extended to two to three years from its current maximum of one year, also taking effect from this Friday. The facility, launched in February 2025, initially had a 100 billion yuan quota for 40 banks, which was doubled to 200 billion yuan starting in February this year, with officials aiming to provide cheap and stable yuan for banks. The expansion of the facility is among 11 measures announced by the HKMA and the Securities and Futures Commission (SFC) on Tuesday to promote the city’s bond and currency market. Another key measure is a new electronic FIC trading platform jointly developed by China Foreign Exchange Trade System (CFETS) and bourse operator Hong Kong Exchanges and Clearing (HKEX), which is applying for a licence from the SFC, according to a statement made by SFC CEO Julia Leung Fung-yee at the same briefing. The Hong Kong-based system would follow international standards with high trading efficiency and appropriate risk management, she said, adding the launch time would depend on the licence approval process, based on the system’s readiness. Leung also said that at the end of this year HKEX’s two clearing houses would begin to accept onshore China government bonds and policy bank bonds held under the Bond Connect scheme as eligible collateral, in order to attract more international investors to yuan bonds. Meanwhile the HKEX would introduce five-year Chinese government bond futures on August 3. “The initiatives announced today mark a big step forward in supporting the internationalisation of the yuan and advancing Hong Kong’s critical role as a global risk management hub,” Leung said at the briefing during the Hong Kong FIC & Bond Connect Summit held in Hong Kong on Tuesday. Speaking at the same summit, Financial Secretary Paul Chan Mo-po said yuan financing had helped to boost the city’s bond market, which had grown by 20 per cent every year over the last two decades. Last year, over US$133 billion of Asia’s international bond issuance was arranged in Hong Kong, accounting for about a quarter of the region’s total. “Increasingly, renminbi financing is part of that success story,” Chan said. “Dim sum bond issuance has exceeded 1 trillion yuan in each of the past two years, with outstanding stock surpassing 1.6 trillion yuan.” “International issuers increasingly see Hong Kong as a natural venue for offshore renminbi fundraising,” Chan added. https://www.scmp.com/business/banking-finance/article/3359730/hong-kong-yuan-facility-expand-150-us736-billion-meet-international-demand?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post