China’s repo markets - J.P. Morgan Asset Management

China’s repo markets

Contributors Aidan Shevlin, Andy Chang

Repos are the largest, most liquid money market instrument in Chinese markets and an important investment option for RMB money market funds.

They offer:
  • A low-risk investment option
  • Good liquidity
  • Higher, market-driven interest returns

Some RMB money market fund investors are concerned about repo market operations, collateral quality and counterparty risk. In this paper, we explain the market’s structure, safeguards and benefits, addressing and allaying those concerns, and making clear how and why repo has become such a critical component of RMB money market funds. Armed with a good understanding of Chinese repo markets, liquidity investors will be able to fully appreciate the vital role of repo in RMB money market funds.

Download the white paper