China's Central Bank Opens 100 Billion Yuan Swap Facility to Fund Share Purchases

China's central bank said on Monday that it will carry out a new round of swap facility operations on November 3, in a move that gives securities, fund and insurance firms a way to obtain liquidity for buying stocks.

The People's Bank of China, known as the PBOC, set the allotment amount for this round at 100 billion yuan, or $15.04 billion. A total of 31 firms applied for the facility, according to the central bank announcement reported on November 2.

How the swap works

The facility is built as a one-year swap. Institutional investors hand over illiquid assets and receive liquid assets in exchange from the central bank. Illiquid assets are holdings that cannot be turned into cash quickly at full value, while liquid assets can be deployed much faster. That exchange is the core of the tool. It is intended to give firms the liquid resources they need to buy stocks in the A-share market, rather than leaving their capital tied up in assets that are harder to sell. The November 3 operation applies that design to the current round, with the firms that applied sharing access to the 100 billion yuan allotment under the facility.

Why the facility exists

The swap facility was launched to support the A-share market after its worst sell-off in almost a decade. It is one of two market support tools that Chinese authorities unveiled in September 2024. The second tool is a relending program for share buybacks. The two tools were created as separate channels, one centered on the swap facility for institutional investors and one centered on relending for buybacks, but both pointed toward supporting share purchases and market activity.

In May 2025, the quotas for the two tools were pooled into a combined 800 billion yuan. Pooling the quotas put the capacity of both programs into a single combined total, rather than keeping each quota counted on its own.

The November round

Monday's announcement sets the timing and the scale for the latest use of the facility. The operation itself is scheduled for November 3, one day after the announcement. Securities firms, fund firms and insurance firms are the institutions covered by this round. The PBOC statement, as reported, gives the allotment amount and the number of applicants, and it frames the purpose in direct terms: institutions can obtain liquidity through the tool to buy stocks. No direct market result from the November 3 operation was included in the announcement, because the operation had not yet taken place when the plan was reported on November 2.