People's Bank of China Signals Policy Shift to Overnight Rate Framework

15:59 - 19.10.2026


October 19, Fineko/abc.az. The People's Bank of China (PBOC) has signaled a strategic shift by moving its primary policy benchmark from the 7-day reverse repo rate to the overnight reverse repo rate.

Speaking at the Financial Street Forum in Beijing, PBOC Governor Pan Gongsheng noted that the transition aims to align China’s monetary framework more closely with global peers.

Economists at Huatai Securities highlight that adopting the 1,25% overnight rate serves as a de facto interest rate cut, effective in pushing down borrowing costs across the banking sector. Following the announcement, the offshore yuan strengthened 0.1% to 6.6813 against the US dollar.