A cross-border platform linking China's onshore and offshore debt markets could boost offshore yuan liquidity, Hong Kong's stock exchange said in a report posted on its website on Friday. Such a "Bond Connect" would expand an existing scheme by allowing foreign institutions to use yuan bonds held offshore as collateral in the onshore repo market, helping them raise funds and channelling liquidity from the onshore to offshore market.
Since 2015, foreign institutions have been allowed to conduct bond repos in the mainland interbank market but they can only use onshore bonds as collateral.
Copyright Reuters, 2017
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