Hong Kong is working on expanding the use of offshore yuan bonds as collateral while developing a market-based yield curve for the debt, reinforcing the city’s role in opening up China’s capital markets.
Financial Secretary Paul Chan said the Hong Kong Monetary Authority and the Securities and Futures Commission will jointly develop the offshore yuan yield curve, particularly at the long end. The city also released a roadmap to grow itself into a fixed-income and foreign-exchange hub via initiatives including development of a central counterparty for clearing repurchase agreements in order to reduce costs and risks.