HKMA, PBoC unveil 11 measures for financial cooperation
Hong Kong Monetary Authority Chief Executive Eddie Yue announced 11 new measures to strengthen financial cooperation between Hong Kong and the Chinese Mainland. The initiatives, unveiled at the FIC & Bond Connect Summit, aim to boost fixed income, currency, and offshore renminbi markets.
Expanding connectivity, boosting liquidity
Six of the 11 measures target the development of Hong Kong's fixed income and currency (FIC) markets and enhance financial market connectivity.
Key among these is the further enhancement and expansion of Southbound Bond Connect, offering investors greater flexibility and diversified options for overseas asset allocation.
This expansion is expected to attract more local and overseas issuers and investors to Hong Kong's bond market.
Additionally, the settlement time for Northbound Bond Connect will be extended through a direct system linkage between CMU and China Central Depository & Clearing Co.
, Ltd., improving efficiency.
The remaining five measures focus on supporting Hong Kong's offshore renminbi (RMB) market, including the enhancement and expansion of the HKMA's RMB Business Facility.
Its aggregate quota will increase from RMB200 billion to RMB500 billion starting July 10, 2026, introducing new tenors of 9-month, 2-year, and 3-year to better satisfy corporate funding demands and support wider RMB use in real economic activities.
New channels, regional ties
The HKMA, in close collaboration with the PBoC, has explored various dimensions to promote Hong Kong's offshore RMB business and RMB internationalisation.
Medium-term initiatives include exploring a tendering mechanism for 7-day offshore RMB liquidity to support banks' short-term funding needs, and the issuance of offshore RMB short-term debt instruments to build the offshore RMB yield curve and provide high-quality investment products.
Furthermore, the HKMA recently signed a Memorandum of Understanding with Bank Indonesia and the PBoC to establish a cooperation framework for promoting bilateral transactions in Indonesian Rupiah and offshore Chinese Renminbi between Indonesia and Hong Kong.
To facilitate enterprises using RMB in cross-border business, the HKMA has also shared good practices with the banking industry, encouraging active exploration and leveraging Hong Kong's strengths in RMB business.
These measures aim to reinforce Hong Kong's status as an offshore RMB business hub.
Incremental steps, not a leap
While these 11 measures are presented as significant enhancements, they largely represent an incremental formalization and expansion of existing cooperation frameworks.
The true transformative impact will depend on the pace of implementation and the broader commitment to capital account liberalization from the Mainland.
Hong Kong's role as a financial conduit is reinforced, yet the initiatives do not fundamentally alter its operational autonomy or market dynamics.