Bank of China released the Off-shore RMB Index (ORI) for the first quarter of 2024 on July 18, 2024.
The results showed that at the end of the first quarter of 2024, the ORI stood at 2.07 percent, an increase of 0.14 percentage points from the 1.93 percent at the end of the previous quarter.
In the first quarter of 2024, RMB foreign exchange trading remained active and the scale of off-shore RMB financing continued to rise, driving the ORI to hit a new record. The development of the off-shore RMB market during the quarter exhibited the following features:
The cross-border use of RMB boosted the expansion of the off-shore RMB markets. In the first quarter of 2024, the total RMB receipts and payments in cross-border transactions handled by domestic Chinese banks on behalf of clients amounted to approximately 12 trillion yuan ($1.70 trillion), a quarter-on-quarter increase of 8.2 percent. The proportion of RMB used in overseas payments and settlements expanded to 4.44 percent, up 0.3 percentage points from the previous quarter. The continued expansion of cross-border RMB usage stimulated the off-shore RMB markets in deposits, loans, investments, and financing.
The off-shore RMB foreign exchange trading and financing continued to expand. In the first quarter of 2024, the off-shore RMB trading grew by 9 percent quarter-on-quarter, with some regions and countries experiencing rapid growth in RMB foreign exchange trading. For instance, the trading volumes in Hong Kong, Japan, and Malaysia increased by 15.6 percent, 14.5 percent, and 19.8 percent quarter-on-quarter, respectively.
At the end of March 2024, the balance of RMB loans in Hong Kong surpassed 520 billion yuan, an 18.8 percent increase from the end of 2023. The outstanding balance of off-shore RMB bonds exceeded 1 trillion yuan for the first time, up 9.1 percent from the end of the previous year, with the off-shore RMB bond issuance reaching 196.6 billion yuan in the first quarter, a 58.8 percent increase from the previous quarter.
At the beginning of 2024, the Hong Kong Monetary Authority included RMB government bonds and policy financial bonds under the Northbound Bond Connect in the list of eligible collateral for its RMB liquidity facility, which promoted the off-shore RMB bond investment.
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