Official announcements from the People's Bank of China

PBOC to Conduct Second Swap Facility Operation Exceeding 50 Billion Yuan to Boost Market Liquidity

Dec 31, 2024, 04:55 AM

The People's Bank of China (PBOC) has announced plans to conduct a second round of the Securities, Funds, and Insurance Companies Swap Facility (SFISF) to support the development of the country's capital markets. The operation is expected to exceed a minimum of 50 billion yuan (approximately $6.9 billion) and will have a one-year term, with the possibility of extension. The swap fee will be determined through a bidding process, and applications from eligible participants are now being accepted. This initiative aims to enhance market liquidity by allowing eligible securities, funds, and insurance companies to use their assets, such as bonds and stock ETFs, as collateral in exchange for highly liquid assets like treasury bonds and central bank bills. The China Securities Regulatory Commission (CSRC) has expanded the participant pool from 20 to 40 institutions for this round. The first SFISF operation, conducted in October, involved 50 billion yuan and was deemed effective in stabilizing the market. The PBOC's broader monetary policy stance remains accommodative, with significant liquidity injections, including 1.7 trillion yuan in December, to bolster the economy and financial markets.