HKMA's Eddie Yue Backs Southbound Bond Connect Quota Increase to 800B Yuan

Hong Kong Monetary Authority chief executive Eddie Yue said a planned increase in the quota for the Southbound Bond Connect trading scheme is necessary after People’s Bank of China governor Pan Gongsheng announced the quota will be expanded from 500 billion yuan to 800 billion yuan, according to RTHK. Yue said there is clear demand for a higher quota for the scheme, which allows onshore investors to access Hong Kong’s bond market. He noted that coverage was extended last year to include asset managers, brokers and insurance companies in addition to banks, and said the quota has been well utilized. Yue also welcomed a planned expansion of the HKMA’s RMB Business Facility from 200 billion yuan to 500 billion yuan. He said the facility’s size was doubled from 100 billion to 200 billion yuan early this year, but that the 200 billion yuan has already been used up, with more banks seeking to participate. He said the expanded RMB Business Facility would help meet demand for stable and lower-cost yuan funding and support broader global use of the currency, including via Hong Kong’s banking network into markets such as the Middle East, ASEAN and Europe.