PBOC Governor Pan Gongsheng unveiled the mechanism as part of a stimulus bonanza last month that signalled the government’s intent to draw a line under the slowing economy. The moves fueled a world-beating rally that saw shares rise as much as 30%.
China’s central bank has set up a swap facility to provide liquidity to institutional investors to buy stocks, part of a broad stimulus package announced earlier that ignited a rally in equities.
The People’s Bank of China will accept applications from eligible securities firms, funds and insurers starting Thursday to obtain highly liquid assets such as government bonds and central bank bills if they provide certain collateral. The size of the tool is RMB500 billion (US$70.6 billion or $92.44 billion) and can be expanded in the future, the monetary authority said in a statement.
