(15 January 2025 – Hong Kong) The Hong Kong Monetary Authority (HKMA) has unveiled plans to launch a RMB 100 billion (US$13.64 billion) trade finance liquidity facility, aimed at bolstering Hong Kong banks’ trade finance services for corporate clients.
The facility will provide a stable and cost-effective source of RMB funding, offering loans with tenors of one, three, and six months at rates based on China’s onshore benchmarks plus a spread. It will operate via existing repo transactions under the HKMA’s RMB liquidity framework and a new currency swap service, enabling banks to exchange Hong Kong dollars for RMB through the HKMA, which will source funds via its swap agreement with the People’s Bank of China. Specific details are expected to be announced ahead of the facility’s launch, slated for late February.
This initiative is part of broader measures to strengthen ties between Hong Kong and mainland China, including reducing cross-border investment barriers and linking faster payment systems for real-time, small-value remittances. The move coincides with mainland China’s efforts to counteract potential trade disruptions, such as the incoming US administration’s proposed 60% tariffs on Chinese exports, by increasing export credit funding and promoting local currency trade financing.