The Hong Kong Monetary Authority (HKMA) announced on 23 October the designation of twelve banks as Primary Liquidity Providers (PLPs) for the offshore renminbi (RMB) market in Hong Kong, known as the CNH market. The designation runs for two years and takes effect on 27 October 2026, following the expiry of the current term.
The total RMB repo facility dedicated to all PLPs will increase from RMB20 billion to RMB22 billion as a result of the designations. The HKMA said the expansion of the PLP Scheme will enhance liquidity support to the offshore RMB market.
THE TWELVE DESIGNATED BANKS
The PLPs are Agricultural Bank of China Limited, Bank of China (Hong Kong) Limited, Bank of Communications Co., Ltd., BNP Paribas and China CITIC Bank International Limited. They are joined by China Construction Bank (Asia) Corporation Limited, Citibank, N.A., Deutsche Bank AG and Hang Seng Bank, Limited. The list is completed by The Hongkong and Shanghai Banking Corporation Limited, Industrial and Commercial Bank of China (Asia) Limited and Standard Chartered Bank (Hong Kong) Limited.
The HKMA said the selection was based on a range of criteria. These included each institution's capability in providing CNH funding and in making market for CNH instruments, as well as its commitment to using Hong Kong as a global hub for offshore RMB business.
COMPARISON WITH THE 2024 DESIGNATION
The previous designation was announced in October 2024, when the HKMA named eleven banks as PLPs for a two-year term starting on 27 October 2024. The latest round covers twelve banks.
That earlier round also raised the repo facility, from RMB18 billion to RMB20 billion. The 2026 designations lift it again, to RMB22 billion. The HKMA first introduced the PLP scheme in October 2014.
HUB STATUS, REVIEWS AND DEPOSIT BACKDROP
The HKMA said the expansion is conducive to strengthening Hong Kong's position as the offshore RMB business hub. Separately, renminbi deposits in Hong Kong decreased by 3.6% in June to RMB1,093.5 billion at the end of that month.
The HKMA said it regularly reviews the operation of the scheme and the performance of PLPs. It considers the need for refinements, including the number of PLPs and the size of the repo facility.
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