Successful Launch of the First Batch of Collateral Bond Substitution Transactions for Foreign Currency Pledged Repo

On June 22, 2026, a host of institutions including Industrial and Commercial Bank of China, Cnian Construction Bank, Bank of Commnunications, CITIC Bank, Shanghai Pudong Development Bank, Zheshang Bank, China Merchants Bank, Bohai Bank, Bank of Beijing, Shunde Rurual Commercial Bank, Guangdong Huaxing Bank and China International Captital Corporation successfully completed the first batch of collateral bond substitution transactions for foreign currency pledged repo via China Foreign Exchange Trade System (CFETS) and Shanghai Clearing House (SHCH). This marks a significant upgrade to the full-lifecycle management mechanism for foreign currency repo operations, bolstering the further development of the interbank foreign currency money market.

The launch of the collateral bond substitution effectively enables participating institutions to conduct foreign currency liquidity management with greater flexibility through the CFETS trading system and the SHCH clearing system, representing an optimization and upgrade of the foreign currency repo collateral management from "static locking" to "dynamic management." For asset allocation, it removes the constraint that collateral once locked, cannot be adjusted, and by unlocking the refinancing potential of high-quality assets, it substantially boosts the flow of market funds and the efficiency of resource allocation. For risk management, it establishes an active adjustment mechanism based on valuation fluctuations and risk appetite, enhancing participating institutions' ability to manage collateral portfolios with greater precision and ensuring that collateral coverage remains accurately aligned with risk exposures in real time, thereby laying a solid operational foundation for building a more multi-layered, efficient, and resilient interbank foreign currency money market.