BEIJING – China’s central bank will begin holding overnight reverse-repurchase auctions every working day from Monday, November 2, giving the one-day instrument a regular role in its management of short-term interest rates.
The People’s Bank of China announced the changes in a notice dated Friday, October 30. It put the current operating rate for overnight reverse repos at 1.25%.
The move changes how the central bank conducts its money-market operations. Overnight auctions will use a fixed interest rate, with participating dealers bidding for quantities, according to the notice addressed to primary dealers.
Seven-day reverse repos will remain part of the toolkit, but their auction format and timing will change. The bank said those operations will use fixed quantities, competitive rate bids and multiple winning rates, mainly around tax-payment periods and month-end.
The notice also shifts the reference rate for other facilities. Tools previously priced at a spread above or below the seven-day reverse-repo rate will instead be linked to the overnight rate. The spreads themselves will not change.
Those facilities include temporary repurchase and reverse-repurchase operations, as well as a repo facility for overseas central-bank-type institutions.
The bank described the changes as a way to further improve its mechanism for managing short-term interest rates. The announcement sets an implementation date and operating rules, rather than leaving the switch as a future proposal.
The distinction matters for readers following China’s economy: the notice is a change in the framework and reference rate used for these operations. It does not announce a new cut from a previous overnight rate, and the central bank describes 1.25% as the current operating rate.
The full terms appear in the PBOC’s October 30 open-market business notice, No. 13 of 2026.
JBizNews Markets Desk | Beijing
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