Overseas investors trade 5.8b yuan on first day of China’s bond repurchase expansion

Overseas investors traded 5.8 billion yuan in China's newly expanded interbank bond repurchase market on its first day of operation.

According to the China Foreign Exchange Trade System, the total volume of outright repurchase deals conducted via the Bond Connect's Northbound trading and the settlement agent channels reached 5.82 billion yuan.

The participating overseas institutions included offshore yuan clearing banks, foreign banks, and overseas asset management products. The underlying bonds covered treasury bonds, policy financial bonds, negotiable certificates of deposit, and commercial banks' ordinary financial bonds.

A breakdown shows that 18 overseas institutional investors executed 44 outright repo transactions worth 3.95 billion yuan with market makers via the Bond Connect. Separately, 12 overseas institutional investors conducted 12 such transactions totaling 1.87 billion yuan with domestic counterparts through the settlement agent channel.

The new mechanism, effective this Monday, aims to better meet the yuan liquidity management needs of foreign investors and increase the use of Chinese bonds in international markets. It expands the channels and scope of bond repurchase services, supporting all types of overseas investors through the settlement agent channel by adopting internationally common practices similar to domestic outright repurchase operations.