In July 2015, the People’s Bank of China sought help from the US Federal Reserve due to a slump in the Chinese stock market, Reuters reports. In the email sent to the US authorities on July 27, a Chinese representative noted the day’s 8.5% slump in China’s stock indices and asked the Fed to share its experience in similar cases.
In particular, the Chinese were interested in the use of repurchase agreements during the US financial crisis in 1987. Steven Kamin, the director of the Fed's International Finance Division, attached Fed transcripts, statements and reports to his response. All these documents were also available on the Fed’s website.
According to the agency, there is no official hotline between the PBOC and the Fed. Besides, the Chinese central bankers used to avoid their American counterparts at international meetings.
The summer plunge in China’s stock market became the largest one-day slide in the country since 2007. Shares in Chinese companies lost about a third in value in just six weeks.
The Chinese monetary authorities decided to trim interest rates and ease crediting terms. They also established stricter control over the software used by market participants.
