HONG KONG (Reuters) – Hong Kong will launch a new yuan-denominated trade finance scheme and expand the hours and scope of its Bond Connect program for mainland Chinese investors, Eddie Yue, CEO of the Hong Kong Monetary Authority, said on Monday.
The announcement joined others made by China's central bank Governor Pan Gongsheng at a business conference, including pledges to help Hong Kong provide cheap yuan financing in the region and measures to support the yuan. , which has slipped to 16-month lows.
Beijing will support Hong Kong in launching the trade finance scheme using 100 billion yuan ($13.64 billion) in currency swaps for one, three and six months, said Yue, head of Hong Kong's defacto central bank. , to reporters on the fringes of Asia. Financial Forum in Hong Kong.
The two central banks have currency swap arrangements for a total of 800 billion yuan.
Under the new facility, banks can exchange their Hong Kong dollars for yuan funding with the HKMA at interest rates linked to onshore rates, providing Hong Kong banks with a stable source of yuan funds at a significantly lower cost, Yue said.
Yue said the settlement date for the Bond Connect scheme will be extended to 4:30pm (0830 GMT) and expanded to include US dollar and euro-denominated bonds, as well as yuan bonds .
The HKMA will also promote yuan repurchase agreements, allowing international investors to use onshore bonds as collateral for yuan currency in Hong Kong, from February 10, he said.
($1 = 7.3316 reminbi)
