HKEX Reports Strong Growth in Treasury Futures, Eyes Wider RMB Use
On.cc · 1 SOURCESabout 3 hours ago7 MIN
Summary
Hong Kong Exchanges and Clearing (HKEX) reported Wednesday that its 5-year Treasury futures, launched in August this year, have attracted strong institutional interest with open interest surging from approximately 900 contracts in the first week to nearly 3,000, drawing participants from sovereign wealth funds, pension funds, asset managers, hedge funds and commodity trading advisors across Europe, the United States, Middle East and Southeast Asia .
Key Points
- HKEX Managing Director and Market Head Yu Xueqin (余學勤) revealed at the Treasury Markets Summit that the 5-year Treasury futures launched in August have seen open interest triple to nearly 3,000 contracts from an initial 900
- International participants include sovereign wealth funds, pension funds, asset managers, hedge funds and commodity trading advisors from Europe, US, Middle East and Southeast Asia
- HKEX OTC Clearing Company has accepted Treasury bonds as non-cash collateral since March last year, with Treasury bonds now forming the largest non-cash collateral pool
- HKMA Assistant Director He Hanjie (何漢傑) said the RMB pool in Hong Kong stands at approximately 1.1 trillion yuan, with liquidity facilities expanded to 500 billion yuan
- The liquidity facilities represent 40 to 50 percent of the deposit base, providing a solid foundation for banking system financing needs
- The People's Bank of China set the Wednesday RMB midpoint at 6.7468 per dollar, ending a 10-day winning streak and down 9 pips
- HKMA officials said Hong Kong will leverage low RMB bond interest rates to promote wider RMB application in public expenditure and attract quality issuers from ASEAN, Middle East and Europe
- On HKD-RMB dual-counter model, some stamp duty revenues may be collected directly in RMB, though Hong Kong services remain predominantly priced in Hong Kong dollars
- China CITIC Bank International expanded its cross-border payment service to southbound merchant collection, allowing mainland customers to pay Hong Kong merchants instantly
- PBOC will conduct 800 billion yuan one-year MLF operation Thursday using fixed-quantity, multiple-price auction method
Why It Matters
The tripling of Treasury futures open interest demonstrates growing international confidence in Hong Kong's financial infrastructure as a gateway for offshore RMB products . With the largest offshore RMB pool globally and expanded liquidity facilities, Hong Kong is positioning itself to capture increased RMB usage in trade settlement and capital markets, reducing reliance on USD while maintaining its role as a premier financial hub .
The tripling of Treasury futures open interest demonstrates growing international confidence in Hong Kong's financial infrastructure as a gateway for offshore RMB products . With the largest offshore RMB pool globally and expanded liquidity facilities, Hong Kong is positioning itself to capture increased RMB usage in trade settlement and capital markets, reducing reliance on USD while maintaining its role as a premier financial hub .