China Backs Hong Kong Launch of 5-Year Yuan Bond Futures as Internationalisation Drive Gains
Updated
Updated · South China Morning Post · Jun 17
China Backs Hong Kong Launch of 5-Year Yuan Bond Futures as Internationalisation Drive Gains
3 articles · Updated · South China Morning Post · Jun 17
Summary
Wu Qing, China’s top securities regulator, said Beijing will support Hong Kong launching five-year yuan-denominated Chinese government bond futures in the near term, though he gave no timetable.
The product would let overseas investors hedge and build longer-term yuan allocations more easily, addressing a long-standing shortage of offshore fixed-income derivatives in Hong Kong.
Demand for yuan assets has been rising as investors diversify from the US dollar; China’s 10-year government bond yield has fallen near a one-year low of 1.73%, while the yuan hit a three-year high against the dollar.
For Hong Kong, the planned futures launch would bolster its role as the world’s largest offshore yuan hub and help it retain global investors as some shift equity exposure to South Korea and Taiwan.