China’s central bank studies making overnight rate its main policy rate

BEIJING/SHANGHAI, Oct 19 (Reuters) China s central bank is considering switching its main policy rate to the overnight reverse repurchase rate, state media reported on ​Monday, in a shift aimed at improving the ‌transmission of monetary policy to support the economy. The overnight repo rate would replace the seven-day reverse repo rate, which has served as the main policy benchmark since 2024. People s Bank of China Governor ‌Pan Gongsheng ​said the change is part of ⁠efforts to refine the ⁠central bank s control of short-term interest rates, according to central bank-run Financial News. Currently, the interbank overnight repo rate has effectively become the target rate for the PBOC s ​monetary policy, Pan was quoted as saying at a key financial forum in Beijing. It sensitively reflects ⁠the supply and demand for short-term ⁠liquidity and has shown greater stability ​in recent years. The change will make interest rate control more ​precise, Pan said. The policy shift gives the PB