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China's new 500 billion yuan swap facility to bolster capital market: experts

China

China's new 500 billion yuan swap facility to bolster capital market: experts
China

China

China's new 500 billion yuan swap facility to bolster capital market: experts

2024-10-10 17:03 Last Updated At:17:57

China's central bank on Thursday unveiled a new swap facility to bolster the growth of the country's capital markets, a strategic move which aims to ensure the steady development of China's financial landscape in the long term, according to industry experts.

People's Bank of China announced that it has decided to set up Securities, Funds and Insurance companies Swap Facility (SFISF), with the initial scale of 500 billion yuan (about 71 billion U.S. dollars).

The SFISF will allow eligible securities, funds and insurance companies to use their assets including bonds, stock ETFs and holdings in constituents of the CSI 300 Index as collateral in exchange for highly liquid assets such as treasury bonds and central bank bills, said a statement.

Industry experts anticipate the newly-launched swap facility will inject significant additional funds into the capital market and reduce risks for non-bank entities amid market downturns.

"This greatly enhances the stock holding capacity of securities, funds, and insurance companies, and their ability to acquire funds. Especially when the market is undervalued, these non-bank entities can easily tap into market liquidity using this tool to strengthen their investments in quality assets so as to ensure market stability," said Xu Fei, an analyst of Wanlian Securities, a state-owned securities company.

Sources close to the central bank revealed that the swap facility has a maturity period of up to one year, with provisions for extension upon maturity.

Industry experts further noted the new monetary policy tool applies a "bonds-for-bonds" principle, which does not expand the scale of the base currency, and is not engaged in quantitative easing.

Furthermore, the swap facility enables non-bank entities to exchange less liquid assets for government bonds or central bank bills, making it easier for repurchase or financing sales in the market.

"The swap facility operates on a 'bonds-for-bonds' model, meaning the central bank does not directly inject funds, thereby avoiding an increase in base currency issuance and quantitative easing. While not involving base currency injections, experiences from the global financial crisis underscores the pivotal role of similar facilities, such as the Federal Reserve's Term Securities Lending Facility (TSLF), in swiftly stabilizing financial markets," said Wen Bin, chief economist at Minsheng Bank.

Starting Thursday, applications from eligible securities, funds and insurance companies will be accepted.

China's new 500 billion yuan swap facility to bolster capital market: experts

China's new 500 billion yuan swap facility to bolster capital market: experts

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Israel envoy denies discussions with UN on enabling Gaza aid deliveries

2025-05-16 23:13 Last Updated At:23:37

Permanent representative of Israel to the United Nations (UN) Danny Danon on Thursday denied that any discussions had occurred between Israel and the UN regarding delivering humanitarian aid to Gaza.

Danon made these remarks at the UN headquarters in response to a query from a China Central Television (CCTV) reporter about the ongoing failure to deliver humanitarian aid to Gaza.

Israel blocked the entry of goods and supplies into Gaza on March 2, following the end of the first phase of a January ceasefire deal with Hamas. It resumed attacks on Gaza on March 18.

With no food, no supplies, and no relief in sight, Gazans have been enduring a relentless fight for survival.

In response to mounting international condemnation, Israel has proposed that its military take over the distribution of aid - a move widely criticized by the international community.

Briefing a Security Council meeting on Tuesday, Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator Tom Fletcher noted that the UN has met for over 12 times with the Israeli authorities regarding the latter's proposed aid distribution model, yet no solution had been found.

Danon, however, stated that no discussions have taken place in recent weeks regarding the issue.

"I don't know about that. Actually I listened to Mr. Fletcher's remarks at the Security Council the other day, and I can tell you that he visited Israel but he had no discussion about that fund because it was way back and in the last few weeks there was no dialogue about that. I would expect UN officials to engage when they want to speak about issues they know how to reach us, they know how to reach the U.S. mission. We are here to engage," he said.

"They got some information from the media, I assume. But I think they should look into that and to realize that if they want to be involved, that is the way to be involved," he added, reiterating that the UN has not reached out.

In response to Danon's denial, the United Nations reaffirmed its position, standing by the public statement released by Fletcher.

"I heard what he said, and we stand by what Mr. Fletcher has said," Farhan Haq, deputy spokesperson for UN Secretary-General noted later on the day, commenting on Danon's statement.

"Mr. Fletcher gave the details," he continued.

Israel envoy denies discussions with UN on enabling Gaza aid deliveries

Israel envoy denies discussions with UN on enabling Gaza aid deliveries

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