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China enhances HK Swap Connect for market opening

China will enhance the Swap Connect between the Mainland and Hong Kong to further open its financial markets. Launched on May 15, 2023, Swap Connect has seen rising trading volumes and smooth operations. By April 2024, 20 Mainland dealers and 58 overseas investors conducted over 3,600 transactions totaling CNY 1.77tr (USD245.3bn), with daily turnover increasing from CNY3bn to over CNY12bn. To improve Swap Connect, the People’s Bank of China, the Securities and Futures Commission, and the Hong Kong Monetary Authority will introduce new product types and ancillary services, including clearing interest rate swaps with International Monetary Market dates and compression services to manage outstanding amounts and lower costs. These enhancements aim to reduce participation costs and improve market efficiency.


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