BEIJING, Nov. 4 (Xinhua) -- The People's Bank of China (PBOC), the country's central bank, said on Wednesday that it will intensify implementation of its re-lending policy for stock repurchases and increased holdings in a bid to maintain capital market stability.
Starting Wednesday, the interest rate on the re-lending facility will be lowered by 25 basis points to 1 percent, the PBOC said in a statement.
This facility is available to 21 national banks and five systemically important city commercial banks. It covers 100 percent of eligible loans, has a term of one year, and can be extended according to the banks' needs.
Banks may add an appropriate margin on top of the re-lending rate to set reasonable maturities and interest rates for stock repurchase and increased holding loans. They should also speed up loan disbursement and strengthen the market value management capabilities of listed companies and major shareholders.
The PBOC will, in addition, ensure sufficient re-lending quotas for banks. Following a symposium on Nov. 2 co-hosted by the PBOC, the National Financial Regulatory Administration and the China Securities Regulatory Commission, banks have submitted applications for more than 200 billion yuan (about 29.77 billion U.S. dollars) in re-lending quotas.
The PBOC will continue to fully meet banks' demand for re-lending and support banks in actively serving the financing needs of listed companies and major shareholders.
In October 2024, the PBOC established the re-lending facility for stock repurchases and increased holdings to incentivize and guide financial institutions to provide loans to eligible listed companies and major shareholders, thus supporting their endeavors in stock repurchases and increased holdings.
Since the launch of this facility, the signed amount for stock repurchases and increased holdings has reached approximately 440 billion yuan, with cumulative disbursements exceeding 280 billion yuan.
Participants at the symposium said the facility has provided an important tool for listed companies to conduct market value management, effectively helping maintain market stability and smooth operation.
The PBOC said that during the symposium, it called for more effective use of the re-lending facility and the Securities, Funds and Insurance companies Swap Facility (SFISF).
The PBOC said it will conduct SFISF operations in a timely manner, expand the number of participating institutions, appropriately lower swap fees, and optimize both collateral and operational arrangements. ■
