Citi has joined the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBOC) in the enhanced offshore renminbi bond repurchase (repo) scheme as a primary liquidity provider, becoming the only US bank among the 11 participating dealers.
The initiative, known as Northbound Repo Connect, allows eligible offshore investors to conduct repo transactions using mainland China interbank bonds held through Northbound Bond Connect.
First launched on 10 February 2025, the scheme represents an important step in developing the offshore RMB repo market and integrating it more closely with international standards.
The enhancements to the scheme, which took effect on 25 August 2025, broadened its functionality by introducing multi-currency settlement – including Hong Kong dollars, US dollars and euros – and by allowing the rehypothecation of bond collateral.
Market participants have highlighted these measures as crucial developments for offshore RMB liquidity management, aligning the framework with global repo market practices and providing international investors with greater flexibility in managing RMB-denominated portfolios.
“We are excited about the new enhancement feature from HKMA, which provides greater flexibility and aligns with global repo market standards. This enhancement reinforces Hong Kong’s unique role as a key connector between mainland China and international markets,” said Paul Smith, head of markets for Japan, Asia North and Australia, Citi.
The addition of Northbound Repo Connect offers institutions a further channel to access onshore fixed income markets while enhancing liquidity and stability in the offshore RMB market.
Smith added: “We have observed increased interest from both local and international clients and have traded a number of times in the past few days, which will further strengthen Citi’s business growth across our Hong Kong and China franchise. As the only US bank among the 11 dealers, we are committed to supporting the offshore term repo market with our scalable balance sheet.”
Citi’s contribution builds on its long-standing involvement in Hong Kong’s cross-border market infrastructure, including Stock Connect and Bond Connect, which link mainland China’s capital markets with global investors.