The PBOC also said a relending scheme designed to fund share buybacks and purchases would shift from a temporary arrangement to a long-term mechanism. The interest rate of the expanded scheme was cut to 1 per cent from 1.25 per cent.
In a separate statement, the China Securities Regulatory Commission (CSRC) urged key index constituents and “dragon head” tech companies to “actively buy back shares” and stabilize market value. The regulator will also prod some newly established exchange-traded funds to “speed up building stock positions”, and encourage fund managers to buy shares in a down-cycle.
The new round of PBOC swap operations “sends another strong signal of policymakers’ commitment to safeguarding capital market stability and supporting investor confidence”, said Hao Zhou, a Hong Kong-based analyst at Guotai Haitong Securities. He said global volatility and external uncertainties continued to weigh on investor sentiment.
The PBOC said bidding under the Securities, Funds and Insurance Companies Swap Facility would take place on Tuesday.
It said 31 brokers and fund companies had already applied for swaps worth more than 100 billion yuan.
The central bank previously conducted such operations in October 2024 and January 2025, injecting a combined 105 billion yuan into the market.
The Shanghai Composite Index climbed 1.1 per cent on Monday, its biggest one-day percentage gain since Aug 27.
The CSI300 and the Shanghai Composite Index both dropped roughly 1 per cent in early trade, giving up Monday’s gains.
“These measures were below expectations,” said Chen Jiande, fund manager at Fujian Tianlang Asset Management Co.
“Many investors in battered tech shares are taking advantage of any rebound to rush out.”
The tech-focused STAR Composite Index dropped 1.6 per cent.
Investors also remain jittery over the financial health of state-owned developer Zhuhai Huafa Group, after media reported it was seeking extensions on some bank loans.
Government bond yields held steady in early trade, with the 10-year and 30-year notes edging down about 0.3 basis points each.