Beijing, December 26, 2023, The Europe Today: The People’s Bank of China, the nation’s central bank, executed a pivotal central bank bills swap (CBS) operation on Tuesday, aimed at enhancing the liquidity of perpetual bonds according to the Xinhua.
This strategic financial maneuver involved a three-month CBS with a substantial valuation of 5 billion yuan, equivalent to approximately 704.57 million U.S. dollars.
The operation, detailed in an official statement by the central bank, welcomed bids from primary dealers at a fixed rate of 0.1 percent. This initiative underscores the ongoing efforts to optimize liquidity mechanisms and fortify the financial stability landscape within China’s economic framework.
The CBS scheme allows dealers to swap the perpetual bonds they hold for central bank bills. Perpetual bonds are fixed-income securities with no maturity date and are not redeemable but pay a steady stream of interest in perpetuity.
