PBoC keeps 7-day reverse repo operations at zero, but injects CNY 327bln via overnight reverse repos

Shifting the tenor of open market operations while keeping the headline 7-day tool at zero is a familiar PBoC pattern when short-term funding conditions tighten abruptly: overnight repos are the pressure valve for intraday and month-end-style squeezes, while the 7-day rate remains the actual policy signal and is deliberately left untouched. The distinction that matters is between liquidity smoothing and easing: injecting at the shortest tenor signals the Bank wants rates near the corridor rather than lower, whereas a cut or expansion of the 7-day or MLF would carry policy intent. Episodes of this kind have tended to cluster around tax payment periods, government bond issuance surges, and quarter-end regulatory checks, when the interbank fixings gap above the policy rate and the Bank tops up to close it. The tell is the DR007 fixing relative to the 7-day reverse repo rate in the sessions that follow: a prompt convergence back to the corridor confirms smoothing, persistence of the spread points to a structural funding gap. Worth noting that overnight operations roll off almost immediately, so the net liquidity position unwinds on its own unless repeated. Follow-ons are whether the operation is repeated across consecutive sessions and whether MLF or relending tools are adjusted at the next scheduled windows.