Markets > Bonds

China conducts fourth central bank bills swap in 2020

Xinhua News,BEIJING
2020-04-21 11:09

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BEIJING, April 21 (Xinhua) -- The People's Bank of China, the central bank, conducted the fourth central bank bills swap (CBS) operation in 2020 on Tuesday to improve the liquidity of perpetual bonds issued by commercial banks.

The CBS, valued at 5 billion yuan (about 707 million U.S. dollars), are open to primary dealers for bidding at a fixed rate of 0.1 percent, the central bank said in a statement.

The swap will be due on July 21, 2020, the statement showed.

On Tuesday, the central bank skipped reverse repos, citing reasonably sufficient liquidity in the money market.

The CBS scheme allows dealers to swap the perpetual bonds they hold for central bank bills, which will effectively boost market demand for perpetual bonds but have a neutral impact on liquidity in the banking system.

Perpetual bonds are fixed-income securities with no maturity date and are not redeemable but pay a steady stream of interests forever.
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