Gov’t launches RMB bond repos and specialized currency swap to boost liquidity

Following the expansion of the RMB/MOP swap agreement between the People’s Bank of China and the Monetary Authority of Macau (AMCM) to RMB50 billion (MOP57 billion), the AMCM on Jan. 2 introduced optimized bond repurchase measures and a specialized RMB currency swap project. In a statement released yesterday, the AMCM said that its aim is to maximize central government support and to promote the effective use of the swap mechanism and fund management instruments to enhance liquidity. Since early 2023, the AMCM has provided local banks with liquidity in MOP and RMB through bond repurchases. The newly launched RMB Fund Facilitation Mechanism allows longer-term liquidity support, while banks can use qualified bonds under the Macau-Hong Kong direct link to conduct repurchase operations, strengthening regional collaboration. To diversify funding channels, the AMCM also introduced a specialized RMB swap against HKD or USD, improving offshore RMB liquidity locally and supporting stable RMB-denominated financial activity. To help the sector understand these measures, the AMCM and the Macau Securities Depository and Clearing Co. Ltd. (MCSD) held a recent online briefing, attended by over 30 local banks. LV

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