Hong Kong allows collateral reuse in offshore yuan bond repos
HKMA says changes will increase offshore participation in mainland China bond market
Hong Kong’s de facto central bank has relaxed collateral restrictions for offshore Chinese yuan bond repurchase (repo) operations.
The Hong Kong Monetary Authority (HKMA) said on August 25 that “enhancement arrangements” for the offshore yuan repo operations had come into effect. The changes allow bond collateral to be reused during the repo period, and for repo agreements to be settled in currencies other than the yuan.
Trading ran smoothly on the first day the new regulations were in effect, the
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