China's Offshore Repo Volumes Surge Amid Legal and Yield Headwinds

Monthly repurchase agreements by offshore institutions in China reached 1.2 trillion yuan in August, more than double the 573 billion yuan recorded a year earlier.

Despite the growth, foreign repo trading accounts for just 1.2 percent of total market volume, constrained by ongoing legal documentation hurdles and low bond yields.

Outright repos surged to represent 23 percent of foreign settlement volumes in August as overseas private investors increased onshore repo participation.