On Tuesday, the People’s Bank of China (PBOC) plans to conduct swap operations with financial institutions totaling over 100 billion yuan ($15 billion) in a single day.
According to the regulator’s website, the PBOC also carried out overnight reverse repo operations on Monday, injecting 541 billion yuan ($80.6 billion) at an annual rate of 1.25%.
The "Securities, Funds and Insurance Companies Swap Facility" (SFISF) was launched in 2024 by PBOC Governor Pan Gongsheng. It was designed to provide brokers, insurance companies, and investment funds with access to liquidity for the purpose of purchasing stocks. While this marks the third such capital injection by the regulator into the financial system, it is the largest to date. The PBOC previously injected 105 billion yuan in both October 2024 and January 2025. At that time, Pan Gongsheng noted that the scale of these injections would depend on prevailing market conditions.
In October, the CSI 300 index—a benchmark for "blue-chip" stocks—fell by 8.5%, marking its worst performance since the market rout in January 2016. Last week, Reuters reported on the bursting of an "AI bubble" in China: the STAR50 index, which tracks semiconductor manufacturers and other technology firms, shed 40% of its value in less than four months, resulting in a loss of approximately $480 billion in market capitalization.