PBOC's Pan: Will act if money market overnight rate persistently deviates from operation rates

The People’s Bank of China (PBOC) Governor Pan Gongsheng said on Wednesday that the central bank would act if the money market overnight rate persistently deviates from operation rates.

Additional quotes

To adjust the temporary overnight reverse and outright repurchase agreement time to 3-3:30 pm.

Meant to ensure flexible and efficient use of temporary overnight reverse and outright repurchase agreements in the open market.

Operating rates will be set at the 7-day reverse repurchase rate in the open market minus 25 basis points and plus 25 basis points, respectively.

Will initiate the action when the money market overnight rate remains consistently below or above the respective operation rates of the tools.

Will provide yuan liquidity to eligible overseas central bank-type institutions through the FIMA RMB repo facility

FIMA RMB repo will accept high-grade yuan bonds, including Chinese government bonds

To issue an action plan for developing offshore finance in the Shanghai International Financial Center.

Yuan to be expanded in offshore business scenarios.

Shanghai to study feasibility of setting up offshore banks.

Market reaction

The above comments had little to no impact on the Chinese proxy, the Australian Dollar (AUD), as AUD/USD trades 0.06% lower on the day at 0.7060 when writing.