China’s central bank, People’s Bank of China (PBOC), is taking steps to help boost the stock market and improve investor confidence. Here’s what they plan to do:
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Swap Facility: The PBOC will allow certain financial institutions like securities firms, funds, and insurance companies to borrow money from the central bank. To do this, they can use assets they already own, like bonds and stocks, as collateral. The money they borrow can only be used to buy more stocks, which is meant to increase stock market activity.
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Re-Lending Facility: Another measure will provide loans to companies and their major shareholders. These loans can be used by the companies to buy back their own shares or increase their ownership, which could help stabilize or raise stock prices.
These two measures will release around 800 billion yuan (about $113 billion) to support the stock market. What if similar things happen in India? #HarshadMehta