Key facts
- The People's Bank of China has narrowed the interest rate corridor for overnight ad hoc operations.
- The new corridor is set at 25 basis points below and above the seven-day reverse repo rate.
- This adjustment aims to improve short-term liquidity management.
- PBOC Governor Pan Gongsheng announced the change at the Lujiazui Forum.
China's central bank has narrowed the interest rate corridor for its overnight ad hoc operations, a move designed to improve its ability to manage short-term liquidity. At the Lujiazui Forum in Shanghai, People's Bank of China Governor Pan Gongsheng announced that the rates for overnight ad hoc repurchase agreements (repos) and reverse repos will now be set at 25 basis points below and above the seven-day reverse repo rate, respectively.
This adjustment aims to provide the central bank with finer control over short-term market rates and liquidity conditions, allowing for more precise steering of financial markets.