People’s Bank of China said the move was aimed at further improving its management of short-term interest rates. (Wikipedia pic)BEIJING: China's central bank said on Friday it would conduct overnight reverse repo operations every working day starting next Monday, in a step towards making the rate its main policy anchor.
The People's Bank of China will carry out the overnight operations through a fixed-rate, quantity-based tender on each business day, with the operating rate currently at 1.25%, it said in a statement.
The central bank, which flagged the shift earlier this month, said the move was aimed at further improving its management of short-term interest rates.
"What occurred today is arguably the clearest signal yet that the PBOC is moving toward an overnight-rate-based operating system similar to those employed by major central banks including the Federal Reserve, the European Central Bank and the Bank of Japan," said Zhou Hao, chief economist at Guotai Junan International.
