The People’s Bank of China continues to take extraordinary efforts to support the battered stock markets on the mainland. Caixin, a Chinese busines news service, reports:
The regulator recently converted US$ 16 billion worth of foreign exchange loans to China Development Bank (CDB) into equity shares in the bank, the sources said. It did the same with US$ 15 billion worth of forex loans to Export-Import Bank of China.
The investments made the regulator China Exim Bank’s biggest shareholder and the CDB’s third-largest shareholder. CDB’s two bigger shareholders are the Ministry of Finance and Central Huijin Investment Ltd.
In April, the regulator invested US$ 32 billion and US$ 30 billion, respectively, in the CDB and China Exim Bank by converting forex loans into equity shares.
It was not clear how many shares the central bank acquired in the banks or how long it will hold them. But the sources said the regulator did not plan to keep them for too long because of worries that supporting policy banks would cloud central bankers’ judgment on monetary policy.
Caixin Online (h/t MarketWatch)
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