The People’s Bank of China is rolling out a new repurchase agreement facility designed to pump yuan liquidity directly into the hands of overseas central banks and international financial institutions.
The facility, known as the FIMA RMB repo facility, lets qualified foreign participants obtain short-term yuan funding by posting RMB-denominated bonds as collateral, often routed through Bond Connect channels. It’s modeled closely after the US Federal Reserve’s own FIMA repo facility, which serves a nearly identical function for the dollar.
How the facility works
Foreign central banks can essentially pawn their Chinese government bonds for short-term yuan cash, without needing to hold an onshore Chinese bank account. The collateral mechanism runs through Bond Connect, a market access program that links mainland Chinese bond markets to international investors via Hong Kong.
Eligible participants include overseas central banks, central bank-type institutions, and qualified foreign institutional investors. The PBOC disclosed these plans around June 16, 2026, though some related repo functions have operational timelines targeting September 2025.
