The People’s Bank of China (PBC) conducted central bank bills swap (CBS) operation on December 24, 2019 in order to improve the liquidity of banks’ perpetual bonds, support banks to replenish capital through perpetual bond issuance, and enable the financial sector to better serve the real economy. The CBS, with an operation scale of RMB6 billion and at a rate of 0.10 percent, will mature in three months.
The operation was open to the primary dealers of open market business for bidding. Winning bidders included financial institutions such as large-sized domestic banks, joint-stock banks, urban commercial banks, rural commercial banks, as well as securities firms. The bonds swapped with the PBC included the perpetual bonds issued not only by large-sized domestic banks and joint-stock banks, but also by urban commercial banks, which indicated the support for the small and medium-sized banks to replenish capital through perpetual bond issuance.
The PBC will conduct CBS operations steadily and prudently in a market-oriented manner while taking into consideration both market development and the actual demands of primary dealers.
