Back to news
China · Central banks · Source: pbc.gov.cn
China's central bank to run daily overnight reverse repo operations from 2 November, currently at 1.25%
Published
Editor: Hedal Kolanyi / AI-assisted
Corrections: none so far. Spotted an error? Tell us via the Contact page.
Summary: The People's Bank of China said on 30 October 2026 that from 2 November it will hold overnight reverse repo operations every working day at a fixed rate, currently 1.25%. Its seven-day operations will become less frequent and change format.
What happened
In Open Market Operations Announcement No. 13 of 2026, the central bank said it is adjusting its operations "to further optimise" how it steers short-term interest rates (our translation). From 2 November 2026:
- It will run an overnight reverse repo tender every working day, at a fixed rate, with primary dealers bidding for amounts. The operating rate is currently 1.25%.
- Seven-day reverse repos will switch to a fixed amount, with primary dealers bidding on rates and multiple winning rates, held mainly around tax payment periods and month-ends.
- Other tools that were priced at a spread to the seven-day rate, such as temporary repos and the repo facility for foreign central bank-type institutions, will be priced at the same spreads to the overnight rate instead.
A reverse repo is a short loan in which the central bank provides cash to banks against collateral, such as government bonds.
Background
According to Xinhua, Governor Pan Gongsheng said earlier this month at the 2026 Financial Street Forum that the bank would study switching its main open market tool to overnight, making the overnight repo rate the main policy rate. Reuters reported that the 1.25% overnight rate, disclosed for the first time, sits below the seven-day reverse repo rate of 1.4%, and that overnight operations were first added to the toolkit in late June.
Why it matters for markets and crypto
The rate a central bank uses to steer money markets affects borrowing costs for banks and, through them, wider financial conditions. Changes in how China's central bank manages liquidity can affect markets in general, including digital assets. This is general background only and does not express a view on any asset.
What to watch next
- 2 November 2026: the first daily overnight reverse repo operation under the new framework.
- Any further announcements from the central bank on whether the overnight rate formally becomes its main policy rate.
Sources
- People's Bank of China, Open Market Operations Announcement [2026] No. 13 (in Chinese), 30 October 2026
- Xinhua, "央行：每个工作日开展隔夜逆回购操作招标" (in Chinese), 30 October 2026
- Reuters via Devdiscourse, "China's central bank steps up shift toward overnight rate as policy anchor", 30 October 2026
Disclaimer: Xorchain Economy news is provided for general information only. It is not financial, investment, legal or tax advice, and it is not an offer or recommendation to buy, sell or hold any asset. Articles are written in our own words from official and other public sources, which are credited and linked at the end of each article. Short quotes are attributed to their authors. Articles are prepared with AI assistance and reviewed by the editor before publication. Figures may be revised by the source, and the original publication prevails. Xorchain is an early-stage project, has no token for sale, and has no affiliation with the institutions mentioned unless stated. Do your own research and consult a qualified adviser before making financial decisions.
Conflict of interest: xorchain.io is an early-stage blockchain project; the author has an interest in it. This is not investment advice.