BEIJING -- The People's Bank of China, China's central bank, conducted a central bank bills swap (CBS) operation on Wednesday to improve the liquidity of perpetual bonds.

The three-month CBS, valued at 5 billion yuan ($696.52 million), is open to primary dealers for bidding at a fixed rate of 0.1 percent, the central bank said in a statement.

The CBS scheme allows dealers to swap the perpetual bonds they hold for central bank bills. Perpetual bonds are fixed-income securities with no maturity date and are not redeemable but pay a steady stream of interest in perpetuity.