Shang Hai Zheng Quan Bao·2025-09-25 18:14Core Insights - The People's Bank of China announced plans to expand the "Swap Connect" market, increasing the daily trading net limit from 20 billion to 45 billion yuan to facilitate interest rate risk management for investors [1] - The China Foreign Exchange Trading Center is optimizing the "Swap Connect" mechanism to enhance market vitality and better meet the needs of foreign investors in managing RMB interest rate risks [1] - The introduction of new interest rate swap contracts linked to the one-year Loan Prime Rate (LPR) under the "Northbound Swap Connect" indicates strong market demand and aims to improve liquidity and price discovery [2] Group 1 - The "Swap Connect" will expand its quoting bank team and improve the management mechanism, with a dynamic adjustment mechanism for quoting banks [1] - As of August 2025, 82 foreign investors from 15 countries and regions have participated in over 15,000 transactions, with a nominal principal of 8.15 trillion yuan [1] - The launch of LPR-linked interest rate swap contracts is expected to enhance the risk management toolbox for domestic and foreign investors [2] Group 2 - Standard Chartered Bank noted that the "Swap Connect" has undergone multiple optimizations, increasing its market attractiveness and participant numbers [3] - The continuous improvement of the "Swap Connect" since its launch in 2023 has led to a more comprehensive product system, addressing diverse risk management needs [2] - The collaboration between mainland and Hong Kong financial markets is expected to support global clients in participating in "Swap Connect" transactions [3]