The Hong Kong Monetary Authority (HKMA) has chosen seven banks as primary liquidity providers (PLPs) for the offshore renminbi (Rmb) market (CNH market) in Hong Kong. The seven designated lenders are Citi, Bank of China, BNP Paribas, China Construction Bank, HSBC, Industrial and Commercial Bank of China and Standard Chartered. The designated PLPs will expand their CNH market activities in Hong Kong, promoting their offshore Rmb businesses and extending the use of CNH instruments, in return for a Rmb2bn dedicated facility each from the HKMA. “This will reinforce the status of Hong Kong as the global hub for offshore Rmb business,” says chief executive of the HKMA, Norman Chan, in a statement. “The launch of the PLP initiative is an important step for further enhancing the infrastructure for the CNH market in Hong Kong. The PLPs will help make CNH products in Hong Kong more liquid and make more use of Hong Kong to support their CNH business worldwide,” he adds. According to the statement, the seven banks were selected as PLPs based on a range of criteria, including the global reach of the institution’s network, its capability to provide CNH funding and financial instruments, and its commitment to using Hong Kong as an offshore hub. The seven were selected from the 16 banks contributing to CNH Hibor fixing, the CNH Hong Kong market interbank lending rate, established in June last year. GTR understands that each bank will serve a designated term of two years, with the HKMA regularly reviewing the schemes effectiveness: the number of PLPs and the amount provided to them. Commenting on the designation, country officer and CEO for Hong Kong and Macau at Citi, Weber Lo, says: “This presents a unique opportunity for expanding our Rmb business by harnessing the full potential of our global network.” “This designation by the HKMA is recognition of Citi’s strong position in the offshore Chinese Rmb market.”