Core Insights - The bond market is experiencing high volatility, with interest rate derivatives becoming essential tools for risk management [1] - Among various interest rate derivatives, interest rate swaps are favored for their ability to directly hedge interest rate risks and their broad applicability [1] Market Growth - The RMB interest rate swap market has shown significant activity in the first half of the year, with a total of 201,000 transactions, reflecting a 22.7% increase in daily average transactions [3] - The nominal principal amount reached 20.9 trillion yuan, with a daily average transaction of 174.51 billion yuan, marking a 28.9% increase [3] - The number of institutions registered for RMB interest rate swap business has exceeded 800, indicating a growing participation in the market [3] Risk Management Functionality - The tightening liquidity in the first quarter has led market participants to prioritize hedging strategies, especially as the bond market transitions from a bull market to increased volatility [4] - Financial institutions are increasingly utilizing interest rate swaps to mitigate investment volatility in a turbulent market environment [4] - The introduction of the "Northbound Swap Connect" 30-year contract provides overseas investors with long-term interest rate risk hedging tools, addressing the needs of pension funds, life insurance companies, and sovereign funds [4]