China lifts Swap Connect quota to 45 bln yuan, eyes offshore yuan growth

China's central bank will expand the number of dealers in its Swap Connect scheme and raise the daily trading quota to 45 billion yuan (HK$49.05 billion) from 20 billion yuan, deputy governor Zou Lan said on Thursday.

Speaking at the Hong Kong Fixed Income and Currency Forum 2025, Zou said the People’s Bank of China will roll out a series of measures to further facilitate cross-border financing and investment, promote high-level financial market opening and accelerate the development of the offshore yuan market.

The initiatives include supporting overseas institutional investors to conduct bond repurchase transactions in China’s onshore market to improve yuan bond liquidity, he noted.

Zou added that the PBOC will work with relevant authorities to supply more offshore yuan-denominated sovereign bonds and other high-quality assets in Hong Kong to broaden the city’s yuan product offerings, while continuing to cooperate with market participants to speed up the launch of yuan government bond futures in the city.

As of end-August, nearly 1,170 overseas investors had entered China’s bond market with holdings of about 3.9 trillion yuan, nearly four times the level before the launch of Bond Connect, Zou said.

More than 80 of the world’s top 100 asset managers are now participating, with Hong Kong serving as a key gateway for global investors into China’s bond market, he added.

STAFF REPORTER