The Hong Kong Monetary Authority has launched a series of new measures to support the development of the Hong Kong fixed income and currency markets, as well as the offshore renminbi market.

On July 7, the Hong Kong Monetary Authority (HKMA) announced a series of new measures in collaboration with the People's Bank of China (PBOC) and the Securities and Futures Commission (SFC), with the aim to further deepen cooperation between the financial markets of Hong Kong and mainland China. These measures are intended to support the development of Hong Kong's fixed income and currency markets, as well as the offshore Renminbi market, and to strengthen Hong Kong's position as an international financial center. Specific measures include: 1. Welcoming collaboration between the financial infrastructure institutions of both regions to jointly develop electronic trading platforms for Hong Kong's fixed income and currency markets. 2. Further enhancing the "Bond Connect" (Southbound Connect) scheme by increasing the annual net investment quota, expanding the range of eligible bonds for Southbound Connect to include repurchase agreements, extending the product range to include Hong Kong dollar and Renminbi bond-related products, and extending the scheme to cover the Macau bond market. The HKMA will also further optimize the management of market makers for Southbound Connect. 3. Supporting overseas investors in using onshore government bonds and policy financial bonds held through the "Bond Connect" (Northbound Connect) scheme as collateral for Hong Kong Futures Exchange and Hong Kong Stock Exchange options clearing. 4. Optimizing the arrangements for the "Bond Connect" (Northbound Connect) scheme by extending settlement times to improve operational efficiency. 5. Enhancing the arrangements for the "Cross-Border Interbank Payment System" (Cross-Border Connect) by including the 7-day interbank repurchase rate (FDR007) as one of the reference rates. 6. Supporting HKEX in officially launching offshore Renminbi government bond futures contracts on August 3 this year. In addition, the HKMA announced five recent initiatives to support the development of the offshore Renminbi market, consolidate Hong Kong's leading position as a hub for offshore Renminbi business, enhance its outreach capabilities, and better serve the real economy. These measures, benefiting from the strong support of the PBOC, also respond to the industry's suggestions for promoting the development of the offshore Renminbi market. Specific measures include: 1. Expanding and optimizing the HKMA's Renminbi business funding arrangements, increasing the total quota from 200 billion Renminbi to 500 billion Renminbi starting from July 10, and adding 9-month, 2-year, and 3-year terms. 2. Studying the introduction of a 7-day offshore Renminbi liquidity tender mechanism. 3. Researching the feasibility of issuing short-term offshore Renminbi debt instruments to further improve the offshore Renminbi interest rate curve. 4. Promoting the establishment of a bilateral currency trading framework for offshore Renminbi and Indonesian Rupiah. 5. Sharing good practices with the banking industry to promote the use of Renminbi. Eddie Yue, Chief Executive of the HKMA, said, "We are pleased to announce this series of measures to further deepen financial cooperation between the two regions and enhance connectivity between the financial markets. This will promote the development of Hong Kong's fixed income and currency markets, strengthen Hong Kong's position as a hub for offshore Renminbi business, and consolidate its role as an international financial center. The announcement of these measures is the result of the joint efforts of the HKMA, the PBOC, and other relevant financial regulatory authorities in both regions over the past period. We will continue to work closely with relevant authorities, industry, and financial infrastructure institutions to ensure the smooth implementation of these measures and explore further optimization measures."