BEIJING — The People's Bank of China, the central bank, conducted the second central bank bills swap (CBS) operation in 2020 on Feb 28 to improve the liquidity of perpetual bonds issued by commercial banks.

The CBS, valued at 5 billion yuan ($714 million), are open to primary dealers for bidding at a fixed rate at 0.1 percent, the central bank said in a statement.

The swap will be due on May 28, 2020, the statement showed.

The CBS scheme allows dealers to swap the perpetual bonds they hold for central bank bills, which will effectively boost market demand for perpetual bonds but have a neutral impact on liquidity in the banking system.

Perpetual bonds are fixed-income securities with no maturity date and are not redeemable but pay a steady stream of interests forever.