The People’s Bank of China will launch the third round of its Securities, Funds and Insurance Companies Swap Facility on Tuesday, after requests from 31 securities firms and fund managers topped 100 billion yuan. The move is intended to inject liquidity and support market stability after demand exceeded expectations. On Nov. 3, the PBOC raised the foreign exchange reserve requirement ratio from 4% to 6% to curb rapid yuan appreciation and protect export competitiveness. The onshore yuan fell 0.33% against the dollar, its steepest single-day decline since May 15, while the move is expected to tighten domestic dollar liquidity.
The decision takes effect on November 15, while the yuan fell onshore after the announcement, following gains of more than 5% since the start of the year and a contraction in activity indicators in October.
Read the full story31 institutions submitted applications worth more than 100 billion yuan, as the operation is set for November 3 after the CSI300 fell 8.5% in October.