HONG Kong's first central clearing system for locally denominated debt is launching in eight weeks with 11 member companies already signed up. The creation of the Central Moneymarkets Unit Service (CMU Service), due to go live on January 31, was formally announced yesterday by Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong. Speaking at the Asia Pacific Issuers and Investors Forum, at the Grand Hyatt, Mr Yam said: ''The CMU Service will offer an efficient, safe and convenient clearing system which will go a long way to reducing transaction costs and settlement risk.'' In conjunction with the CMU service announcement, Mr Yam confirmed the authority had obtained agreement from the Chinese that the Exchange Fund debt programmes could be run on a continuous basis even though the money borrowed is for repayment after the reversion of sovereignty. ''So the 1997 hurdle has been overcome,'' he said. ''The Exchange Fund debt programmes are on the 'through train'.'' At the CMU Service, the 11 companies with commitments to join include the Bank of China (Hong Kong Branch), Jardine Fleming Bank, LTCB Asia, Oakreed Financial Services and Sanwa International Finance. Also included are Schroders Asia, Standard Chartered Bank, Standard Chartered Asia, Hongkong and Shanghai Banking Corp, Union Bank of Switzerland and Wardley. Financial Secretary Hamish MacLeod said CMU Service was part of the continuing efforts to develop Hong Kong's debt market. He said this would ensure the competitive edge of Hong Kong as an international financial centre would be further enhanced. He flagged the setting up of such a service in his 1993 Budget. Hongkong Bank will act for the monetary authority to provide safe-keeping and sub-custodian functions in CMU Service. The service will be non-profit making. It will be operated by the monetary authority and will perform the role of a central custodian and clearing agent for Hong Kong dollar debt instruments issued by the private sector. The system is modelled on that of the Exchange Fund debt which launched in 1990. It can handle immobilised, that is physical debt notes held stationary in a depository, or dematerialised, that is debt paper held in electronic form only. Transfer of title to the notes will be effective by computer book entry. Mr Yam told delegates at the conference: ''I look forward to your support in this modest but important step in the development of the debt market in Hong Kong. ''We have I think played our part in bringing a supply of paper to the market, creating pricing benchmarks and improving the market infrastructure through introducing this CMU. ''It is now up to the private sector to take the development of this market further.'' Mr Yam said at the end of November there was $26 billion of Exchange Fund Bills outstanding, held mostly by banks and other authorised institutions as liquid assets. At the same time the amount of Exchange Fund Notes (and government bonds) outstanding was about $5 billion. The issue of Hong Kong dollar market debt by supra-national bodies was encouraging and the development of three-year government exchange fund notes was important in creating liquidity. Work is currently going on to develop and launch five-year paper, but Mr Yam did not give any further details on this.