Hong Kong's sole yuan clearing bank plans mainland NCD issuance

By Reuters News

SHANGHAI, Oct 15 (Reuters) - Bank of China (Hong Kong), the sole yuan-clearing bank in the financial hub, plans to issue interbank debt instruments in China's onshore market, a move aimed at further strengthening the city's position as the leading offshore yuan centre.

Here are some of the details:

  • Bank of China (Hong Kong) plans to issue interbank negotiable certificates of deposit (NCDs) this year, which are popular short-term debt instruments issued between banks for their financing needs, according to a statement from the Interest Rate Self-Regulatory Mechanism, which is overseen by the People's Bank of China.

  • The lender has become "the first offshore yuan-clearing bank granted an issuance quota for onshore NCDs," the regulator said.

  • The bank said it plans to issue up to 22.2 billion yuan ($3.3 billion) worth of NCDs in 2026, according to a separate statement this week.

  • "All issuance will be denominated in yuan and the bank will determine the size and tenor of each NCD at its discretion based on market conditions and the bank's circumstances," it said.

  • In July, authorities from Beijing and Hong Kong unveiled a range of measures to bolster currency, bond and gold trading in Hong Kong, stepping up efforts to establish the city as a leading offshore yuan centre amid heightened geopolitical tensions.

  • The yield on one-year NCDs stood at about 1.44%, while the offshore yuan HIBOR , a gauge that measures the interbank borrowing cost in Hong Kong, was at about 1.78% this week.

($1 = 6.6917 yuan)

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