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 on October 19, 2026. Speaking at Beijing’s Financial Street Forum, he also set out measures to expand RMB market access.
Overnight rates take center stage
Pan said the overnight interbank repo rate, DR001, is already the de facto monetary policy target, while the policy rate and most open market operations have seven-day maturities.
The PBOC will study making overnight operations predominant, with their rate becoming the primary policy rate when appropriate.
Loan pricing will diversify beyond the loan prime rate (LPR), allowing financially strong companies to negotiate overnight-rate benchmarks while retaining the LPR for small businesses and individuals.
The PBOC also plans to improve LPR quotations and retire benchmark deposit and lending rates, unchanged since October 2015.
It has published average deposit rates since Q1 2026 as pricing references.
Backstops with collateral guardrails
The PBOC, National Financial Regulatory Administration and China Securities Regulatory Commission plan a non-bank redemption backstop for market-wide bond liquidity stress, requiring high-grade collateral and macroprudential safeguards.
Standing Lending Facility access will extend to all deposit-taking institutions; tenors are overnight, seven days and one month.
Other plans include interbank-exchange bond connectivity after testing, onshore FX trading for eight offshore RMB clearing banks and repo-facility access for foreign RMB clearing banks.
Broader access and risk controls
Pan rejected competitive RMB devaluation and retained intervention for extreme conditions.
He pledged offshore RMB liquidity support, financing for three regional innovation hubs and AI risk controls.
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