High CNH rates curb appetite for Hong Kong’s new repo scheme
Dealers remain hopeful initiative is a prelude to full onshore repo market access
Hong Kong’s new renminbi bond repo scheme is off to a slow start, with high offshore funding costs and paperwork bottlenecks putting a damper on early trading, dealers say.
Launched on February 10, the offshore repo arrangement allows investors in Northbound Bond Connect to use their onshore bonds as collateral for repo transactions in Hong Kong. However, despite registering a large number of client enquiries about the scheme, dealers say actual participation has so far been limited to testing
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