The People's Bank of China (PBC) conducted a central bank bills swap (CBS) operation on November 27, 2020 in order to improve the liquidity of bank-issued perpetual bonds, support banks to replenish capital through perpetual bond issuance, and enable the financial sector to better serve the real economy. The operation registered RMB5 billion, with a term of three months and a rate of 0.10 percent.
The bidding for the operation was open to primary dealers of open market operations. Winning bidders included financial institutions such as large-sized state-owned commercial banks, joint-stock commercial banks, urban commercial banks, rural commercial banks, as well as securities firms. The bonds swapped with the PBC included perpetual bonds issued not only by large-sized state-owned commercial banks and joint-stock commercial banks, but also by urban and rural commercial banks, reflecting the support for 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 market conditions and reasonable demands.
