The People's Bank of China used a speech at the Lujiazui Forum to announce a package of policy measures spanning monetary operations, offshore renminbi market development and market oversight infrastructure. The main actions are a further refinement of short-end interest rate control, creation of a repo facility for offshore central bank-type institutions, a pilot for offshore renminbi foreign exchange trading in the Shanghai Free Trade Zone, and work on a macroprudential liquidity support tool for nonbank financial institutions in stress scenarios. On rates, the central bank will improve the operating mechanism for its temporary overnight reverse repo and repo tools and reset their rates to 25 basis points above and below the seven-day reverse repo rate, narrowing the corridor to 50 basis points from 70 basis points. It also plans to add overnight reverse repo operations to better meet short-term banking system liquidity needs. For offshore users, central banks or monetary authorities, international financial organizations and sovereign wealth funds will be able to obtain renminbi liquidity from the central bank through repos backed by Chinese government bonds and other high-grade bonds. In Shanghai, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and China CITIC Bank will be authorized to conduct offshore renminbi foreign exchange trading on the China Foreign Exchange Trade System platform in the Shanghai Free Trade Zone. The central bank is also studying a nonbank liquidity support tool that would provide emergency liquidity through swaps when bond or other markets face systemic stress and normal liquidity channels are blocked. The facility would not be a standing source of funding and would require compliance with macroprudential requirements and high-grade collateral. Alongside those measures, the central bank said it will work with the Shanghai municipal government and other departments on an action plan for developing offshore finance in Shanghai, including freer trade offshore bonds, offshore trade finance services and international treasury center business. It also announced the formal launch of an interbank market data repository to consolidate trading, custody and settlement data for deeper market monitoring. In the same speech, the central bank linked these steps to a broader push to modernize China's financial markets, expand direct financing and support higher-level two-way financial opening.
Central Bank of the Republic of China2026-06-17
People's Bank of China announces six measures including a narrower short-end rate corridor and new offshore renminbi liquidity tools
The People's Bank of China announced a package of measures at the Lujiazui Forum covering monetary operations, offshore renminbi markets and market monitoring. Key steps include narrowing the short-end interest rate corridor to 50 basis points, creating a renminbi repo facility for offshore central bank-type institutions and launching a Shanghai Free Trade Zone pilot for offshore renminbi foreign exchange trading through six banks. It is also studying a nonbank emergency liquidity tool for systemic stress scenarios and launching an interbank market data repository.