Hong Kong plans to add an offshore RMB overnight average index to improve the interest rate pricing system

The Zhitong Finance App learned that infrastructure construction in Hong Kong's offshore RMB market is welcoming new progress. Following the joint launch of 11 deepening measures by the regulatory authorities of the two regions, the Treasury Markets Association (TMA) is currently seeking comments from the industry on introducing a new offshore RMB interest rate benchmark. According to reports, the new indicator currently being prepared is the Offshore RMB Overnight Average Index (CNH HONIA), which refers to the Hong Kong Dollar Overnight Average Index (HONIA). The core is to create an overnight reference interest rate closer to the actual cost of capital based on actual market transaction data.

Currently, the TMA official website publishes CNH HIBOR fixed prices every trading day, covering a period of overnight to 12 months. If a new RMB interest rate benchmark is added in the future, it is expected that the level of CNH HONIA will be announced simultaneously every day.

In response to this trend, TMA CEO Chen Shaoping confirmed it. He said that the purpose of this consultation is to listen to the industry's opinions on product system optimization, and the focus is on how to make the interest rate benchmark tool more in line with the actual needs of the RMB hedging transaction and repurchase market. He further pointed out that in the case of the Hong Kong dollar or other currencies, they all have different interest rate reference benchmarks (such as the Hong Kong dollar interbank interest rate and the Hong Kong dollar overnight average index). “From the perspective of the mid-term development of the RMB, whether due to hedging or the needs of a mature repurchase market, it is only natural to develop an interest rate benchmark such as CNH HONIA.”