Hong Kong's offshore renminbi debt market's new issuance surges in 2022

The offshore renminbi debt market in Hong Kong continued to expand in 2022, with total new issuance increasing by 24 percent year on year to 688 billion yuan (about 99.7 billion U.S. dollars), data released by the Hong Kong Monetary Authority (HKMA) have showed.

The rise was mainly driven by a surge of 255 percent in the issuance of certificates of deposit (CDs), which more than offset the reduction in non-CD issuance, according to the HKMA's latest quarterly bulletin titled The Hong Kong Bond Market in 2022.

As a result, the total outstanding amount of offshore renminbi debt securities recorded a year-on-year increase of 40 percent to 949.3 billion yuan at the end of 2022.

Northbound Trading under Bond Connect continued to serve as a major channel for foreign investors to invest in the onshore bond market, accounting for 61 percent of foreign investors' annual total turnover in China's interbank bond market.

During the year, Northbound Trading recorded significant growth, with average daily turnover increasing by 25 percent from 2021 to over 32 billion yuan, the HKMA said.

The HKMA said it is liaising closely with the Chinese mainland authorities on the provision of more diversified risk management tools, including the introduction of offshore mainland government bond futures, with a view to facilitating the deeper opening-up of the mainland bond market and strengthening Hong Kong's status as a risk management center. (1 yuan equals 0.15 U.S. dollar)