Swap Connect, the scheme that allows mutual access between the interest swap rate markets of Hong Kong and mainland China, has completed its first batch of northbound trades.
The scheme will enable offshore investors to participate in the onshore RMB interest swap market, offering them a way to hedge more than US$550 billion of Chinese bond risk.
The commencement of trading has been welcomed by major asset servicers and exchanges.
Yang Ji, vice president of Citi China and general manager of Citi China Global, described Northbound Swap Connect as “another milestone in the connection and cooperation of financial infrastructures between the mainland and Hong Kong”.
Other schemes linking China’s onshore market with Hong Kong include Bond Connect, ETF Connect, Wealth Connect and Stock Connect, which launched back in 2014.
Citi China is one of the first batches of northbound Swap Connect market makers and announced on Monday that it had successfully executed the first batch of transactions with offshore investors.
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