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He central bank of china launched a “redemption line” on Thursday that will give companies access to 500 billion yuan (about 70.6 billion dollars) in liquidity, in a new measure to shore up the economy.
The program will allow “qualified companies to exchange bonds, exchange-traded funds, constituent shares of the CSI 300 and other assets with the People’s Bank of China for high-quality liquid assets, such as Treasury bonds and central bank bills,” he indicated.
He added that the first phase of the operation will be 500 billion of yuan and that “could be expanded further depending on the situation.”
“Starting today, applications from qualified securities, funds and insurance companies will be accepted.” The bags of China y Hong Kong recorded strong increases on Thursday due to the impact of the new measure.
he indice Hang Seng de Hong Kong rose 3.86%, while the Shanghai Composite Index advanced 2.57%. The Shenzhen index, China’s second stock exchange, rose 2.21% in morning trading.
The head of the Banco Popular de China, Pan Gongshengindicated that the measure will “significantly increase” the ability of companies to access funds to purchase shares.
In recent weeks, China began to announce a set of measures to stimulate the economy.