The People's Bank of China, the country's central bank, announced on Tuesday to create new monetary tools to bolster the stock market.

Pan Gongsheng, governor of the PBOC, said the central bank will establish a swap facility for securities, fund and insurance companies, which will allow eligible institutions to obtain liquidity from the central bank by pledging assets. 

This policy is expected to significantly enhance these institutions' capabilities to acquire funds and boost shareholdings, Pan said.

Additionally, Pan said the PBOC will introduce a relending facility to encourage banks to provide loans to listed companies and major shareholders to support share repurchases and shareholding increases.