FINANCE

China Shifts Main Policy Rate to Overnight Reverse Repo Rate

Published: Nov. 2, 2026 3:46 p.m. GMT+8

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China’s central bank has replaced the seven-day reverse repo rate with the overnight reverse repo rate as its main policy rate, effective Monday.

The People’s Bank of China (PBOC) now conducts overnight reverse repo operations every working day at a fixed rate through quantity bidding, under a new arrangement announced Friday. The rate currently stands at 1.25%. Seven-day operations are mainly used around tax deadlines and month-ends.

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PBOC replaced seven-day reverse repo rate with overnight rate as main policy rate, effective Monday.
Overnight rate set at 1.25% via fixed-rate quantity bidding; seven-day operations reserved for tax deadlines and month-ends.
Overnight transactions account for about 90% of daily money market trading; governor had previewed the shift.

AI generated, for reference only

What Happened When

September 2026：: PBOC Governor Pan Gongsheng previews the shift, stating DR001 had effectively become the target rate.

Since October 2026：: Overnight borrowing rates fall to around 1.25% from about 1.4% earlier in the year (as reported by mutual fund source).

Friday, October 31, 2026：: PBOC announces new arrangement for overnight reverse repo operations at fixed rate through quantity bidding; rate set at 1.25%.

AI generated, for reference only