2024 Policy Address: Hong Kong to boost offshore RMB business

Plans include upgrading the Central Moneymarkets Unit.

Chief Executive John Lee has announced new measures to enhance market access and strengthen the offshore renminbi (RMB) business in Hong Kong.

“We will continue to enhance the mutual market access regime and reinforce our status as the world’s largest offshore renminbi business hub, contributing to the internationalisation of RMB,” he said during his 2024 Policy Address.

Key measures include upgrading the Central Moneymarkets Unit to facilitate international investors in settling various assets in multiple currencies and establishing a central clearing system for RMB-denominated bond repurchase (repo) transactions, making RMB sovereign bonds issued in Hong Kong a preferred choice for offshore collateral.

Additionally, the government seeks to improve the Cross-boundary Wealth Management Connect Scheme and utilise the currency swap agreement with mainland China to boost offshore RMB liquidity and introduce more RMB-denominated investment products.

The Hong Kong Exchanges & Clearing (HKEX) will promote the listing of more shares in RMB, whilst the issuance of RMB bonds will be expanded to include green and sustainable bonds.

The government will also seek support from the Ministry of Finance to increase the size and frequency of RMB sovereign bonds in Hong Kong.

Moreover, it said that officials are committed to actively working with mainland authorities to broaden the Bond Connect (Southbound Trading) scheme, allowing more non-bank financial institutions to participate and enhancing liquidity management tools for offshore investors.

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