HKMA names Deutsche Bank offshore yuan primary liquidity provider

By Reuters News

BEIJING/SHANGHAI, Oct 23 (Reuters) - The Hong Kong Monetary Authority (HKMA) said on Friday that it had designated Deutsche Bank AG as a Primary Liquidity Provider (PLP) for offshore yuan in Hong Kong with effect from October 27, bringing the total number of such banks to 12.

The city's de facto central bank also said the total yuan repo facility dedicated to all PLPs will increase to 22 billion yuan ($3.3 billion) from 20 billion yuan, adding that the expansion will enhance liquidity support to the offshore yuan market and is conducive to strengthening the position of Hong Kong as an offshore yuan business hub.

The announcement comes as the current two-year term for the existing liquidity providers is set to expire next week. It is the latest in a series of steps by Hong Kong and Beijing to bolster currency, bond and gold trading in the city, stepping up efforts to establish Hong Kong as a leading offshore yuan centre amid heightened geopolitical tensions.

In July, Beijing expanded a yuan-liquidity facility with HKMA to ​500 billion yuan from 200 billion yuan in an effort to give the HKMA a deeper offshore pool.

($1 = 6.6705 Chinese yuan renminbi)

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