China unveiled a broad package of stimulus measures to bolster the economy and the equity market

To support the stock market, China will set up a swap facility that will allow brokerages, mutual funds and insurers to tap funding from the central bank, Pan Gongsheng, governor of the People’s Bank of China, said at a press conference in Beijing on Tuesday. The initial size of the programme will capped at 500 billion yuan (US$71 billion) but may be expanded in the future, he said.

China will also set up special relending that will give listed companies and major shareholders access to bank loans for stock buy-backs and stake increases, he said.The central bank will also cut the reserve requirement ratio by 0.5 percentage point shortly to unleash 1 trillion yuan into the financial system. It will also slash the seven-day reverse repo rate, the down payment ratio for second home purchases and the existing mortgage rate, Pan said.