BOCHK to issue onshore NCDs, first offshore yuan clearing bank
Bank of China (Hong Kong), the sole yuan clearing bank in the city, plans to issue up to 22.2 billion yuan in onshore interbank certificates of deposit this year, becoming the first offshore clearing bank granted such a quota. The move aims to boost Hong Kong's status as a leading offshore yuan hub.
Bank of China (Hong Kong) (2388), the sole yuan-clearing bank in the city, plans to issue interbank negotiable certificates of deposit (NCDs) in mainland China's onshore market, a move aimed at further strengthening Hong Kong's position as the leading offshore yuan centre.
The lender has become "the first offshore yuan-clearing bank granted an issuance quota for onshore NCDs," according to a statement from the Interest Rate Self-Regulatory Mechanism, which is overseen by the People's Bank of China.
The bank said it plans to issue up to 22.2 billion yuan (HK$26.04 billion) worth of NCDs in 2026, according to a separate statement this week. NCDs are popular short-term debt instruments issued between banks for their financing needs.
"All issuance will be denominated in yuan and the bank will determine the size and tenor of each NCD at its discretion based on market conditions and the bank's circumstances," it said.
The move comes after authorities from Beijing and Hong Kong in July unveiled a range of measures to bolster currency, bond and gold trading in the city, stepping up efforts to establish Hong Kong as a leading offshore yuan centre amid heightened geopolitical tensions.
The yield on one-year NCDs stood at about 1.44 per cent, while the offshore yuan HIBOR, a gauge that measures the interbank borrowing cost in Hong Kong, was at about 1.78 per cent this week.