China's central bank begins 500 billion yuan exchange program to help stock market Reuters
HONG KONG/SHANGHAI (Reuters) – China's central bank said on Thursday it will start accepting applications from financial institutions to join a newly created bailout program, worth 500 billion yuan ($70.62 billion), to help the capital market.
The People's Bank of China (PBOC) said that eligible securities companies, financing companies and insurance companies can apply to join the exchange, which enables them to easily access financing to buy shares.
The announcement came after Chinese stocks fell on Wednesday following a sharp rally, as early investor enthusiasm for Beijing's economic stimulus plans grew.
The PBOC first announced the plan on September 24 as part of broader policies to stimulate the economy and improve financial markets.
Under the exchange facility, qualified securities firms, mutual fund companies and insurers can use their assets including bonds, ETFs and shares in the components of the CSI 300 Index as collateral to trade more liquid assets such as treasury bonds and central bank debt.
The initial scale of the exchange program is set at 500 billion yuan, and may be expanded in the future.
($1 = 7.0800 )
