PBOC Discloses Overnight Reverse Repo Rate at 1.25%, Daily Operations to Begin from November
nashnova research
The PBOC disclosed its overnight reverse-repo rate at 1.25% for the first time and will run the facility daily from November 2 — shifting the policy-rate anchor from seven-day to overnight faster than the market expected.
Why was this rate never made public before?
The overnight reverse repo — the central bank lending cash to banks and collecting it the next day — is set at 1.25%, below the current seven-day benchmark rate of 1.4%.
This means → the PBOC has already been injecting the shortest-term liquidity at a lower rate, but never formally disclosed it.
Bloomberg previously reported that 1.25% was set when overnight operations first launched in June; the official disclosure now confirms the market's earlier estimate.
What changes in November?
From November 2, overnight reverse repos become a daily operation; seven-day repos will be used only during tax-payment periods, month-ends, and similar windows.
In plain terms = the PBOC's main short-term funding tool shifts from "lend for 7 days" to "lend for 1 day," with the seven-day facility demoted to a backup role.
This reflects a move to manage liquidity at daily precision rather than weekly.
Why move the policy anchor to overnight?
In October the PBOC signalled plans to switch its primary policy-rate anchor from the seven-day rate to the overnight rate — part of a decades-long interest-rate liberalisation drive.
This means → China's operating framework is converging with the Fed, the ECB, and other major central banks, all of which anchor policy rates at the overnight tenor.
Some analysts expected the switch to take months, but daily operations launching on November 2 show the pace is notably faster than anticipated.
市场有风险，内容仅供研究参考，不构成投资建议。