Treasury desks at twelve designated banks will have a larger dedicated renminbi repo facility from 27 October, when the HKMA raises the scheme’s total capacity to RMB22 billion (the extra RMB2 billion belongs to the scheme, rather than to each bank). [1]

The increase is 10 per cent. Bank of China (Hong Kong), HSBC, Standard Chartered Bank (Hong Kong), Citibank and BNP Paribas are among the twelve Primary Liquidity Providers designated for the new two-year term. The selection criteria include their ability to supply offshore renminbi funding and make markets in renminbi instruments. [1]

So, the announcement reaches the desks financing those instruments directly.

There is demand for the assets they finance. In the Ministry of Finance’s 23 October sovereign bond tenders, applications for the two-year reopening reached RMB13.684 billion against RMB4 billion issued. The ten-year reopening attracted RMB11.640 billion against RMB2.5 billion issued. [2]

For a treasury desk, that order book leaves a separate calculation. Demand for a renminbi asset establishes neither the buyer’s funding cost nor the margin left after paying it. The tender results supply accepted bond prices; the liquidity announcement supplies additional repo capacity. [2] [1]

The twelve designated banks’ additional RMB2 billion of dedicated funding capacity takes effect on 27 October. [1]