Pan plans overnight policy rate and non-bank liquidity backstop
People's Bank of China (PBOC) Governor Pan Gongsheng proposed an overnight policy rate and announced plans for a non-bank liquidity backstop at the Financial Street Forum in Beijing on October 19, 2026.
Overnight rates take center stage
Pan said the PBOC would consider moving its predominant open market operations from seven days to overnight when appropriate.
The overnight operation rate would then replace the seven-day reverse repo rate as the primary policy rate, matching the de facto target, interbank overnight repo rate DR001. Loan pricing would diversify beyond the loan prime rate (LPR), with stronger companies able to negotiate overnight-rate benchmarks while small businesses and individuals retain the LPR.
The PBOC also plans to reform LPR quotations and phase out legacy deposit and lending benchmarks, unchanged since October 2015.
Average deposit rates published since Q1 2026 provide banks with pricing references.
Liquidity access widens with safeguards
The PBOC, National Financial Regulatory Administration and China Securities Regulatory Commission plan a non-bank redemption backstop requiring high-grade collateral and macroprudential safeguards.
Standing Lending Facility access will expand to all deposit-taking institutions; tenors are overnight, seven days and one month.
Bond-market connectivity awaits testing.
Eight offshore RMB clearing banks will join an onshore FX trading pilot.
Foreign clearing banks will gain access to the RMB repo facility established in June 2026.
RMB reach depends on measurement
Pan put RMB international payments at 3–4 percent and fifth globally using SWIFT, versus 6–7 percent and third including other systems.
He said 2025 daily global FX turnover approached $10 trillion, with RMB above $800 billion and around 80 percent offshore.
China has no intention of seeking trade advantage through devaluation, he said.