Xinhua Silk Road - Belt and Road Portal, China's silk road economic belt and 21st Century Maritime Silk Road Website Xinhua Silk Road - Belt and Road Portal, China's silk road economic belt and 21st Century Maritime Silk Road Website
Subscribe CustomBlackClose

Belt & Road Weekly Subscription Form

download_pop

Research ReportCustomBlackClose

The full edition of the report is available at Xinhua Silk Road Database. You can click the “Table of Content” to have a general understanding of it.

Click on the button below to create your account and get immediate access to thousands of articles.

Start a Free Trial

Xinhua Silk Road Database
Economy

China to conduct first central bank bills swap to support perpetual bonds

February 20, 2019


Abstract : China will soon conduct the first central bank bills swap (CBS) operation to support the issuance of perpetual bonds by commercial banks, a central bank official said Tuesday.

BEIJING, Feb. 19 (Xinhua) -- China will soon conduct the first central bank bills swap (CBS) operation to support the issuance of perpetual bonds by commercial banks, a central bank official said Tuesday.

Sun Guofeng, head of the monetary policy department of the People's Bank of China (PBOC), told a press conference that the central bank will charge fees on the CBS based on market rates.

The CBS scheme allows primary dealers to swap the perpetual bonds they hold for the central bank bills, effectively boosting market liquidity of perpetual bonds, according to Pan Gongsheng, deputy governor of the PBOC.

Pan clarified that the CBS scheme is not the Chinese version of quantitative easing, and has a neutral impact on the liquidity in the banking system.

Perpetual bonds are fixed-income securities with no maturity date and are not redeemable but pay a steady stream of interests forever.

The tool is often used to replenish capital for commercial banks, so they have better financing capability to support the real economy, according to Pan.

In January, the Bank of China issued the first-ever perpetual bonds by a Chinese bank, which were oversubscribed by investors including domestic insurance companies, securities firms, and some foreign institutions.

Some other banks are actively preparing for the issuance of perpetual bonds to replenish capital, according to Pan.

Scan the QR code and push it to your mobile phone

Keyword: China-central-bank CBS

Write to Us belt & road login close

Do you want to be a contributor to Xinhua Silk Road and tell us your Belt & Road story? Send your articles to [email protected] and share your stories with more people.

Click on the button below to create your account and get im http://img.silkroad.news.cn/templates/silkroad/en2017te access to thousands of articles.

Start a Free Trial

Ask Us A Question belt & road login close

If you have any questions, please enter them in the box below.

Identifying code Reload

Write to Us belt & road login close

Do you want to be a contributor to Xinhua Silk Road and tell us your Belt & Road story? Send your articles to silkroadweekly@xinhua.org and share your stories with more people.

Click on the button below to create your account and get im http://img.silkroad.news.cn/templates/silkroad/en2017te access to thousands of articles.

Start a Free Trial