China plans to add two onshore interest-rate derivatives for Swap Connect: Bloomberg

China plans to include two new onshore interest-rate products with standardized contracts in the Swap Connect scheme, which will expand global investors' access to boost trading, Bloomberg reported on Thursday, citing people familiar with the matter.

The China Foreign Exchange Trade System, the Shanghai Clearing House, and OTC Clearing Hong Kong are exploring adding trading and clearing services for the Standard Interest Rate Swaps and Standard Bond Forwards to the Swap Connect scheme, targeting implementation by 2028, the report said.

The discussions are under the guidance of the People's Bank of China, according to the report.

The plan marks the latest step for China to further open its domestic bond market to foreign investors, which also reflects its ongoing efforts to promote the internationalization of yuan and bolster Hong Kong's role as the world's largest offshore yuan trading hub.

Driven by its effective trading and settlement, as well as precise risk-hedging capabilities, these two onshore interest-rate derivatives gained significant traction in recent years.

Hong Kong Exchanges and Clearing (0388) said in a reply that it remains committed to working closely with regulators and market infrastructure partners to continuously enhance the Swap Connect scheme, support its long-term sustainable development, and further strengthen Hong Kong’s role in promoting yuan internationalization.

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