Hong Kong Appoints 11 Banks as Key Liquidity Providers for Offshore RMB

Hong Kong has named 11 banks as primary liquidity providers (PLPs) for a term of two years, effective from October 27, 2024. This designation aims to enhance liquidity and support the growth of RMB transactions in the region.

The selected institutions include notable names such as Agricultural Bank of China, Bank of China (Hong Kong), and Standard Chartered Bank (Hong Kong), among others. The complete list of PLPs also features Bank of Communications, BNP Paribas, China CITIC Bank International, China Construction Bank (Asia) Corporation, Citibank, N.A., Hang Seng Bank, Hongkong and Shanghai Banking Corporation, and Industrial and Commercial Bank of China (Asia).

The Hong Kong Monetary Authority (HKMA) chose these banks based on their performance as current PLPs and their contributions to the CNH HIBOR fixing process. Their selection reflects their active engagement and capability in the local RMB market, known as the CNH market.

In conjunction with this announcement, the HKMA has also decided to expand the RMB repo facility for all PLPs. The facility will see an increase from RMB 18 billion to RMB 20 billion, which translates to approximately US$2.8 billion or HK$21.79 billion.

The HKMA emphasized that enhancing the PLP Scheme is crucial for improving offshore RMB liquidity, further positioning Hong Kong as a prominent hub for RMB business activities. This initiative underscores the city's commitment to fostering a robust financial environment for international RMB transactions.