China's Central Bank Shifts to Daily Overnight Repo Operations, Adopting Fed-Style Policy Anchor

The People's Bank of China (PBOC) has begun conducting daily overnight reverse repo operations at a fixed rate of 1.25% starting Monday, November 2, 2026. This move signifies a shift towards making the overnight rate its primary policy anchor, similar to the operational frameworks of major central banks like the Federal Reserve, European Central Bank, and Bank of Japan. The PBOC had announced on Friday that these daily operations would utilize a fixed-rate tender based on quantity, aiming to enhance its management of short-term interest rates.