Beijing:China's central bank announced on Monday its decision to reduce funding costs for share buybacks and expand access to a financial swap facility as measures to stabilize the stock market.

According to Anadolu Agency – English, the People's Bank of China will cut the interest rate charged to banks under its share buyback lending program from 1.25% to 1% and make the program permanent. This initiative is intended to support banks in lending to listed companies purchasing their own shares and to major shareholders increasing their stakes.

Regulators have encouraged banks to broaden lending under this program, with the flexibility to set borrowing rates by adding a margin to the central bank's rate. Since the program's inception in October 2024, banks have signed loan agreements amounting to approximately 440 billion yuan ($66.2 billion) and have disbursed over $42 billion.

Furthermore, the central bank plans to lower fees under its swap facility and extend access to additional financial institutions. This facility enables securities firms, fund managers, and insurers to exchange eligible assets for government bonds or central bank bills, which can then be used to secure funds for stock purchases. The current outstanding balance under this facility is approximately $15.8 billion.

The China Securities Regulatory Commission has approved 31 securities firms and fund managers to participate in the third round of swaps, with applications totaling more than $15 billion submitted by these institutions. The central bank is set to conduct this operation on Tuesday, November 3, with the swaps having a one-year term and an option for extension.