China’s Central Bank to Hold Daily Overnight Reverse Repo Auctions at 1.25%

This is a plumbing change with real signalling weight: by making the overnight rate the daily anchor and repricing other tools off it, the PBOC is effectively sharpening its short-end policy rate into a more continuous operating target. The practical burden falls on bank treasury desks managing liquidity around tax periods and month-end, where the seven-day facility remains the release valve. The open question is whether the overnight rate holds close to 1.25% in ordinary sessions, or whether the wider bidding format on the seven-day tool produces visible dispersion at those stress points.