PBoC sets overnight reverse repo rate at 1.25% (vs prev. 1.25%)

• Changes 7-day reverse repo operations to fixed-quantity, rate-tender auctions with multiple winning prices.
• Says other tools, including temporary repos and offshore central bank repo tools, will be priced off the overnight reverse repo rate.
• 7-day reverse repo operations will be conducted mainly around tax periods and month-end.

An unchanged policy rate alongside a structural overhaul of open market operations is a familiar PBoC pattern: the bank has repeatedly adjusted its liquidity toolkit, shifting between quantity and price-based operations and reassigning which rate serves as the anchor, while keeping headline rates steady. The substantive element is the recasting of the 7-day reverse repo from a fixed-rate operation to fixed-quantity auctions with multiple winning prices, which transfers rate discovery to the tender and typically widens the dispersion of funding costs around the anchor rather than moving the anchor itself. Anchoring temporary repos and offshore repo tools to the overnight rate consolidates the rate corridor architecture, a direction the PBoC has pursued across past framework refinements as it narrowed the role of the older policy rates. Confining 7-day operations to tax periods and month-ends formalises a countercyclical liquidity stance already visible in practice, where injections cluster around known drain points; the tell in such episodes is whether money-market fixings stay inside the intended band during the intervening stretches. The follow-ons are the first tenders under the new format, the dispersion of winning rates, and how interbank and bill rates behave around the next quarter-end. For CNY and front-end rates the established pattern is that framework changes of this kind reprice liquidity premia at the short end rather than the policy path, with the overnight rate's own level being the signal that matters.