Hong Kong is ramping up efforts to expand the use of local currencies across the Asia-Pacific region, including developing a local currency debt market, as part of a push to hedge against rising geopolitical risks, according to Hong Kong Monetary Authority (HKMA) CEO Eddie Yue Wai-man.
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Speaking at the fourth edition of the Asean+3 Economic Cooperation and Financial Stability Forum in Hong Kong on Tuesday, Yue underlined the need to strengthen regional financial ties as Hong Kong and its neighbours grappled with tariff shocks, disrupted supply chains and heightened market volatility.
“While progress has been made, local currencies still play a relatively small role in the region’s cross-border transactions and external financing, and the bulk of our trade invoicing remains denominated in foreign currencies,” he said. The grouping refers to the 10 member states of the Association of Southeast Asian Nations plus China, Japan and South Korea.
“We need to continue to enhance regional payments integration and local currency settlement to boost cross-border efficiency and strengthen economic resilience,” the HKMA chief said. “This requires continued investments in deepening local capital markets, developing hedging instruments, and ensuring financial infrastructures are interoperable across borders.”
In a move towards developing a local currency debt market, the Asian Bond Markets Initiative – aimed at channelling Asia’s vast savings pool into supporting regional investment – was launched in 2002.
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