China's PBOC Launches $112 Billion Swap Facility to Boost Stocks; CSI 300 Gains 3.7%

Oct 18, 2024, 02:41 AM

China's central bank, the People's Bank of China (PBOC), has officially launched a special relending facility on October 18 to support the stock market by providing funds for listed companies' stock repurchases and shareholding increases. The facility aims to inject liquidity into the market, with funding schemes reportedly totaling $112 billion to $148 billion, including an 800 billion yuan swap scheme. PBOC Governor Pan Gongsheng stated that documents related to stock repurchase and the special relending tool would be officially released today, emphasizing that the PBOC does not directly fund the swap facility. The swap scheme allows brokerages to obtain cash using shares as collateral. The PBOC, along with the National Financial Regulatory Administration (NFRA) and the China Securities Regulatory Commission (CSRC), held meetings with major financial institutions to discuss the implementation of financial incremental policies designed to bolster market confidence and promote economic growth. Following these announcements, Chinese stocks advanced, with the CSI 300 Index gaining as much as 3.7%.