PBOC Unveils $71 Billion Swap Facility to Bolster Stock Market: Explores Additional Measures Amid Prolonged Market Declines

The PBOC intends to establish a swap facility worth a minimum of US$71 billion to support the stock market. This would enable financial institutions to purchase shares with this funding.

Nonetheless, certain experts demanded more significant measures to bolster investor trust in the wake of over three years of market downturns.

The head of the People's Bank of China (PBOC), Pan Gongsheng, announced on Tuesday that brokers, mutual funds, and insurance companies will initially have the opportunity to participate in the new programme by leveraging the shares they currently hold. He also mentioned that if this swap programme proves to be successful, an extra 500 billion yuan could be funneled into the country's main markets.

"I have spoken with Wu Qing, the chairman of the China Securities Regulatory Commission, about the possibility of releasing another 500 billion yuan in a second round, or even a third batch of 500 billion yuan if the plan is implemented successfully," he stated. "We are open-minded about the new policy."

Pan indicated that leading financial decision-makers are considering the establishment of a stabilisation fund to support the stock market. Experts speculate that this could signify extra financial backing of over 1 trillion yuan.