BEIJING/SHANGHAI — China's central bank said on Monday it will conduct swap operations with financial institutions on Tuesday that could inject more than 100 billion yuan ($15.04 billion) into the country's struggling stock market.
It would be the third time the People's Bank of China (PBOC) uses the liquidity tool, created two years ago to allow brokers, insurers and fund companies to obtain liquidity for stock purchases.
The announcement came after the benchmark CSI300 Index slumped 8.5 percent in October for its worst month since early 2016, as economic weakness and sharp corrections in tech stocks hit investor confidence.
The move "sends another strong signal of policymakers’ commitment to safeguarding capital market stability and supporting investor confidence," said Hao Zhou, a Hong Kong-based analyst at Guotai Haitong Securities, noting global volatility and external uncertainties continue to weigh on investor sentiment.
The PBOC's announcement came after media reports that Chinese regulators held meetings with financial institutions on Monday to discuss tools to support capital markets.
China's battered stock market rebounded on Monday in expectation of supportive policies.
The benchmark Shanghai Composite Index climbed 1.1 percent, posting its biggest one-day percentage gain since Aug. 27.
The PBOC said bidding under the Securities, Funds and Insurance Companies Swap Facility (SFISF) will take place on Tuesday.
So far, 31 brokers and fund companies have applied for the swaps, worth more than 100 billion yuan.
The central bank conducted such operations twice previously, in October 2024, and January 2025, injecting a combined 105 billion yuan into the market.