The two-year government bond reopening announced by the HKMA on October 15 comes with a currency designation that matters more to the treasury dealer than the government name on the instrument (Hong Kong can issue the bond without making it a Hong Kong dollar asset).

The tender is on October 22. It is denominated in renminbi. The ten-year Hong Kong dollar reopening is on October 21. Those adjacent dates put different funding calculations on the same desk.

So the cheaper funding number on our screen needs its currency attached. The Wang Report’s money panel recorded one-month HIBOR at 2.71% on October 16, down 13 basis points from September 4. That measures Hong Kong dollar funding. It supplies no renminbi borrowing rate for the dealer pricing the October 22 purchase.

A desk using Hong Kong dollars would also have to price the currency conversion and any hedge. The available HIBOR fixing alone cannot establish its cost of holding the bond.

On October 22, the tender will put a price on two-year renminbi government debt. The buyer’s funding calculation has to close in renminbi too.