In a recent press release, Hong Kong Exchanges and Clearing Limited (HKEX) said it welcomed new measures to enhance Swap Connect, aimed at strengthening international access to China’s interbank interest rate swap market.
HKEX Backs Enhancements to Swap Connect Programme
The enhancements, jointly announced by the Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China last week on Thursday, are expected to allow investors to better manage interest rate risk linked to their renminbi (RMB) holdings.
HKEX said its clearing subsidiary, OTC Clear, will work with the China Foreign Exchange Trade System (CFETS) and Shanghai Clearing House (SHCH) to implement the updates.
Planned changes include extending the maximum tenor of swap contracts to 30 years and adding the 1-year Loan Prime Rate (LPR 1Y) as a floating reference rate option.
Launched in May 2023, Swap Connect enables mutual access between Hong Kong and Mainland China’s interbank swap markets.
Since its inception, it is said to have seen consistent growth and has become the primary channel for international investors to hedge RMB interest rate exposure.
By the end of April 2025, 79 international institutions from 15 markets had completed over 12,000 transactions under the programme, with a total notional volume of around RMB6.5 trillion.
“HKEX looks forward to working closely with CFETS, SHCH, regulators and market participants to further enhance and develop the Swap Connect programme, facilitating the continued opening of China’s financial markets and the internationalisation of the RMB,” said HKEX.
