OSTTRA completes first compression of USD/CNH swaps

OSTTRA on Wednesday said the pilot run of its triReduce compression service was conducted on August 28 with five financial institutions, including Bank of China (Hong Kong) and Crédit Agricole CIB, compressing swaps with a notional value of $5.8bn (£4.25bn).

Erik Petri, head of optimisation at OSTTRA, said: “As CNH activity increases in the region, this service will provide valuable capital and operational efficiencies for banks needing to manage risk in this fast-growing currency pair.”

Zhang Chengdong, head of trading at Bank of China (Hong Kong), added: “The compression for USD/CNH cross currency swaps further enhances our capital and operational efficiency.”

John Luk, head of emerging markets trading for Greater China, Credit Agricole CIB, said: “Credit Agricole CIB is a prominent proponent of compression for its cost and risk mitigation benefits, which also aligns with our operational strategy for our market activities franchise.”

HKEX said the Asian clearing house handled in July $255.2bn of USD/CNH CCS, adding OSTTRA’s triReduce will lower costs and risks associated with such heavily traded instruments.

In Asia-Pacific (APAC) currencies, OSTTRA said the compressed notional value more than doubled in the first half of 2025, compared to the same period last year, while the total notional value cleared by HKEX so far in 2025 surpassed $33.1tn, more than twice what it was in 2023.

The firm said it plans to conduct another HKEX-cleared compression run for the USD/CNH pair in the coming months with more participants.

OSTTRA said this month Eurex has gone live on triBalance optimisation which enables swaps dealers to optimise margin and collateral across a range of swaps central counterparties.