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RMB: Key market updates on liquidity and markets

Explore how strengthening offshore liquidity and expanding RMB market infrastructure are presenting new opportunities in this Q2 2026 update.

13 April 2026

7 mins

Corporate & investment bankingTrade & working capitalTransaction banking
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Recent initiatives by the Hong Kong Monetary Authority (HKMA), the Hong Kong SAR Government and the People’s Bank of China (PBoC) are expanding offshore Renminbi (RMB) liquidity, strengthening RMB capital markets, improving FX hedging conditions and deepening cross-border financial connectivity. Together, these developments reinforce Hong Kong and Mainland China’s joint role in supporting the broader internationalisation of RMB.

Key takeaways
  1. HKMA enhanced the Renminbi Business Facility (RBF), expanding eligible lending activities and doubling the quota to RMB200 billion.
  2. The 2026–27 Hong Kong SAR Budget introduces initiatives to improve offshore RMB bond yield curve, interest rate market, and strengthen cross-border connectivity.
  3. The PBoC removed the 20 per cent FX risk reserve requirement for onshore long FX-CNY forward trades, which may improve pricing for forward and options contract.
  4. The PBoC’s recognition of Global Master Repurchase Agreement supports onshore China Interbank Bond Market bond repo transactions.
  5. Hong Kong’s offshore RMB liquidity remains resilient, with deposits rising to RMB1,029.3 billion in February.

Policy and market developments in Hong Kong and Mainland China continue to reinforce the Renminbi’s growing role in cross-border trade and finance. Enhancements to liquidity facilities, new policy initiatives and further market opening measures are deepening the RMB ecosystem for corporates and financial institutions engaged in treasury, funding and investment activities.

01

HKMA expands Renminbi business facility to support RMB liquidity

The Hong Kong Monetary Authority (HKMA) has introduced enhancements to the Renminbi Business Facility (RBF) to further strengthen offshore RMB liquidity and support wider RMB usage in the real economy.

Recent developments include both an expansion in the facility’s scope and a significant increase in available liquidity, enabling banks to better support clients’ RMB financing and treasury needs.

Broader funding scope from December 2025

From 1 December 2025, Phase 2 of the RBF expands eligible uses of funding beyond trade finance to include working capital and capital expenditure loans.

This provides participating banks with a more stable RMB funding source to support cross-border trade, investment and treasury activities.

We are among the pilot banks participating in the scheme. The Bank has already executed multiple RMB working capital loan transactions in Hong Kong, alongside intragroup financing transactions in Singapore, leveraging Hong Kong’s role as a regional hub supporting both local and international corporates.

Expanded quota and liquidity access

From 2 February 2026, the RBF quota doubled from RMB100 billion to RMB200 billion, allowing higher allocations to participating banks and expanding access to offshore RMB liquidity.

02

Hong Kong Budget advances offshore RMB market development

The 2026–27 Hong Kong SAR Budget reinforces the city’s strategy to develop as a global fixed income and currency hub while strengthening its position as the leading offshore RMB centre.

Building on the HKMA and Securities and Futures Commission (SFC) Fixed Income and Currency (FIC) Roadmap, the Budget outlines initiatives aimed at deepening RMB liquidity, strengthening price discovery and expanding cross-border connectivity.

Market activity remains resilient. RMB deposits in Hong Kong rose 3.6 per cent month-on-month in February to RMB1,029.3 billion, bringing year-to-date growth to over 7 per cent (compared with end-December 2025 levels), reflecting continued offshore liquidity growth.

Key initiatives include:

  • Regular issuance of RMB bonds across a range of tenors, alongside efforts to attract high-quality issuers to Hong Kong, helping to build a more complete offshore RMB yield curve.
  • Working with industry participants to strengthen offshore RMB yield curve formation and price discovery in short- to medium-term interest rates.
  • Promoting more efficient foreign exchange pricing and transactions between RMB and regional currencies, helping to reduce transaction costs.
  • Exploring the introduction of Mainland China government bond futures in Hong Kong, expanding RMB risk management tools for market participants.
  • Including RMB trading counters under Southbound Stock Connect and enhancing Bond Connect, to facilitate greater cross-boundary RMB flows through Hong Kong.
  • Launching an electronic bond trading platform in the second half of the year to support more efficient trading and liquidity in fixed income markets.

These initiatives reinforce Hong Kong’s role as the primary offshore platform for RMB funding, investment and risk management.

03

PBoC removes 20 per cent FX risk reserve requirement for onshore forwards

Effective 2 March 2026, the PBoC removed the 20 per cent foreign exchange risk reserve requirement for onshore long FX-CNY forward trades. This adjustment aims to support the development of the foreign exchange market and restore a more symmetric framework for onshore FX forwards.

Previously, the 20 per cent reserve requirement acted as a capital cost for banks, which was typically reflected in the pricing for clients purchasing foreign currency forward. The removal of this ratio eliminates this cost component, potentially leading to improved pricing for forward and options contracts.

04

PBoC recognises GMRA for onshore CIBM bond repo transactions

Effective 30 January 2026, the PBoC recognised the Global Master Repurchase Agreement (GMRA) for bond repo transactions involving China Interbank Bond Market (CIBM) bonds. This allows offshore institutional investors to use the widely adopted GMRA framework for onshore CIBM repo trading.

This development supports greater documentation standardisation, aligns China’s repo market more closely with international practice and may improve market accessibility for offshore investors seeking to manage RMB bond liquidity more efficiently. It also represents another step in opening China’s onshore fixed income market to international participation and strengthening cross-border connectivity between global investors and onshore RMB assets.

What this means for corporates

For corporates engaged in China-linked trade, supply chains or treasury activities, recent developments point to a broader and more mature RMB ecosystem across liquidity, hedging and capital markets.

As offshore liquidity deepens and cross-border financial infrastructure evolves, corporates may find increasing opportunities to:

  • Access RMB financing across working capital, capex and treasury needs.
  • Benefit from potentially improved pricing for onshore FX forwards and options following the removal of the 20 per cent reserve requirement.
  • Diversify funding sources and manage cross-border cash flows more efficiently.

Taken together, these developments reinforce Hong Kong’s role as the leading offshore RMB platform while also highlighting continued opening and deepening of Mainland China’s onshore financial markets.

For further insights on how RMB adoption is shaping corporate treasury, trade and supply chains, read our latest report, “Renminbi in motion for corporates“.

What to watch in RMB markets

As offshore liquidity, cross-border financial infrastructure and onshore market access continue to evolve, RMB is expected to play a progressively larger role in global trade settlement, treasury management, funding and investment activities.

Market participants will likely continue to monitor developments in:

Frequently asked questions about RMB market developments

What is the Renminbi Business Facility (RBF)?

The Renminbi Business Facility is a liquidity facility established by the Hong Kong Monetary Authority (HKMA) to provide RMB funding at SHIBOR to participating banks. The facility supports RMB lending activities such as trade finance, working capital loans and cross-border corporate financing.

Why is Hong Kong important for offshore RMB markets?

Hong Kong is the world’s largest offshore RMB centre. The city hosts deep RMB liquidity pools, active RMB bond markets and key financial infrastructure such as Bond Connect and Stock Connect, enabling cross-border RMB investment and financing.

What does the expansion of the RBF quota mean for corporates?

The expansion of the RBF quota to RMB200 billion increases offshore RMB liquidity availability to banks. This may improve corporates’ access to RMB financing solutions such as working capital loans, cross-border trade financing and treasury funding.

What is the significance of GMRA recognition for CIBM bond repo?

The PBoC’s recognition of the GMRA for repo transactions involving CIBM bonds allows offshore investors to use a globally recognised legal framework for onshore repo trading. This supports documentation standardisation, improves accessibility and may help international investors manage RMB bond liquidity more efficiently.

How is the Hong Kong government supporting RMB internationalisation?

The 2026–27 Hong Kong Budget outlines initiatives to deepen offshore RMB markets, including expanding RMB bond issuance, improving price discovery, strengthening cross-border connectivity and introducing new market infrastructure such as electronic bond trading platforms.

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