China LaunchesFIMA RMB Repo Facility to Accelerate Global Demand for Yuan

China will establish a new liquidity facility for overseas central banks and official institutions, said People’s Bank of China Governor Pan Gongsheng, in what analysts describe as a proactive step toward boosting global demand for yuan assets.

Speaking at the 2026 Lujiazui Forum on Wednesday, Pan announced the establishment of the RMB Repo Facility for Foreign and International Monetary Authorities (FIMA RMB Repo).

Under the facility, overseas central banks, monetary authorities, international financial organizations and sovereign wealth funds will be able to obtain yuan liquidity from the PBOC through repo transactions using Chinese government bonds and other high-grade bonds as collateral, Pan said, adding, “The instrument will facilitate RMB liquidity management for overseas central bank-like institutions and their allocation of RMB assets.”

Shao Yu, chief economist at the innovation center of Fudan University’s School of Management, said the new repo facility bears similarities to the US Federal Reserve’s FIMA Repo Facility, which provides dollar liquidity to foreign official institutions.

However, while the Fed’s facility was built mainly to meet emergency demand for US dollar liquidity, China’s latest move reflects more proactive efforts to expand international demand for yuan assets, Shao said.

The facility’s relatively broad collateral scope — and potentially diverse maturities — suggest it is designed not only to address short-term liquidity needs, but also to support longer-term reserve allocation and investment demand from overseas institutions, he said, adding, “It would help transform the yuan from a trade currency into a reserve and investment currency, moving toward a higher level of international currency status.”

Lou Feipeng, a researcher at Postal Savings Bank of China, said the FIMA RMB Repo facility represents an important addition to the infrastructure supporting yuan internationalization, helping address a key weak link that offshore institutions holding yuan assets could lack ready access to yuan liquidity.

This, together with a broadened range of participants in Shanghai’s offshore yuan foreign exchange market, signals China’s efforts to build an offshore financial system that is more closely aligned with international practices, Lou said, with Shanghai’s role in expanding RMB convertibility and as a global RMB asset center strengthened.

The PBOC governor said the central bank will authorize six banks — including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank — to conduct offshore yuan foreign exchange trading through the China Foreign Exchange Trade System platform in the China (Shanghai) Pilot Free Trade Zone as a pilot.

Pan said this move will help advance the two-way opening-up of the forex market and lift Shanghai’s role in global asset allocation and risk management using the renminbi.

Also, as part of China’s efforts to advance institutional opening-up in the financial sector, Zhu Hexin, administrator of the State Administration of Foreign Exchange, said at the forum that SAFE will soon roll out more concrete measures to facilitate cross-border investment and financing.

These include launching a comprehensive reform of cross-border policies related to foreign direct investment, further simplifying foreign exchange administration for outbound direct investment and issuing a new batch of quotas under the Qualified Domestic Institutional Investor scheme, Zhu said.

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