PBOC Rate Shift Plan Would Lower Borrowing Costs: Analysts

Analysts report that the PBOC is considering shifting its policy rate benchmark to the overnight reverse-repo rate. This transition, which may take several months, is expected to effectively lower borrowing costs and provide support for bond investments. To ensure a successful implementation, the central bank will likely need to conduct more frequent liquidity operations using the new benchmark candidate to test market reception and stabilize the transition toward the new overnight policy interest rate anchor.