First Compression Test Successful by OSTTRA triReduce via HKEX
Bank of China (Hong Kong) and Credit Agricole CIB Lead Compression Run of USD/CNH Cross-Currency Swaps
In a significant move, OSTTRA's market-leading portfolio compression service, OSTTRA triReduce, has successfully completed its first compression run for USD/CNH cross-currency swaps (CCS) cleared through HKEX's OTC Clear. This groundbreaking event was carried out in collaboration with five financial institutions, including Bank of China (Hong Kong) and Credit Agricole CIB.
A total of $5.8 billion in notional value was compressed during this pilot run, marking a significant step towards enhancing the capital and operational efficiency of Bank of China (Hong Kong), as expressed by Zhang Chengdong, Head of Trading, Deputy General Manager of Global Markets. Credit Agricole CIB, an active participant in HKEX's OTC Clear, sees the compression service as a key offering for their bank, with John Luk, Head of Emerging Markets Trading for Greater China, expressing his pleasure at the introduction of the cleared USD/CNH CCS compression service to the local market.
The successful first run has paved the way for further compression runs. Building on this success, OSTTRA intends to conduct another compression run for the USD/CNH pair with a larger group of market participants in the coming months on HKEX's OTC Clear.
The outstanding volume of USD/CNH CCS cleared on HKEX's OTC Clear was $255.2 billion in July 2025, reflecting the high demand for this service. This demand is further underscored by the significant increase in compression volume in Asia-Pacific (APAC) currencies. OSTTRA has seen a more than doubling of compressed notional value in the first six months of 2025 compared to the same period last year.
The collaboration between OSTTRA and HKEX comes amid increasing demand from market participants for compression services in Asia. The service provided by OSTTRA triReduce offers market participants a way to efficiently reduce costs and risks associated with this heavily traded contract, providing valuable capital and operational efficiencies for banks needing to manage risk in the fast-growing USD/CNH currency pair, as stated by Erik Petri, Head of Optimisation at OSTTRA.
This development is a testament to the growing importance of compression services in the financial industry, particularly in the Asia-Pacific region. With the success of the first run, it is expected that more financial institutions will join the compression runs, further streamlining the trading process and enhancing the overall efficiency of the financial market.
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