The UAE and Hong Kong are all set to strengthen their bilateral relationship in cross-border debt securities issuance and investment, following a memorandum of understanding signed by their central banks to improve connectivity between their financial markets.
The Hong Kong Monetary Authority and the Central Bank of the United Arab Emirates held a meeting in Hong Kong to formalise their agreement, which aims to further integrate their debt capital markets and related financial infrastructures.
The MoU is anticipated to simplify debt issuance, trade, and settlement between Asia and the Middle East.
It was signed by Eddie Yue, CEO of the HKMA, and Khaled Mohamed Balama, governor of the CBUAE.
The partnership supports Hong Kong’s goals to solidify its position as a bridge to global capital as well as the UAE’s vision to become a major connector between the Middle East, North Africa, and global financial markets.
“This initiative will help the UAE become the gateway for issuers and investors in the MENA region to access the China and Asian debt markets, while also allowing Chinese and Asian issuers and investors to gain direct access to the MENA debt market through the UAE,” CBUAE Governor Khaled Mohamed Balama said in a statement, as reported by the Arab News.
“We aim at unlocking the potential of the two debt capital markets to allow seamless and cost-effective cross-border debt securities issuance, trading, investment, settlement as well as collateral management,” the senior official added.
The agreement comes after the two sides met in Abu Dhabi in May 2024 (also their first) to discuss prospects for investment and cooperation in the development of financial infrastructure in mainland China, the Middle East, and North Africa.
The HKMA’s CEO, Eddie Yue, while stating that the deal highlights Hong Kong’s position as a financial centre, noted that the move would strengthen the Chinese special administrative region’s position as a gateway to the Renminbi and global debt markets by promoting cooperation and the sharing of knowledge in debt capital markets.