As of 15:00, DR001 (overnight pledged repo) weighted average was 1.4281% and
DR007 was 1.4234%; money-market rates are oscillating narrowly around the policy
pivot. In September the PBOC rolled two tenors of outright reverse repos at
equal amounts, ending a two-month pattern of increasing volumes; the 3-month
outright reverse repo on Sept. 3 was also rolled at an unchanged amount. Wang
Qing, chief macro analyst at Orient Jincheng, said liquidity is relatively
ample, and the PBOC has kept 7-day reverse-repo operations minimal or at zero
since early September to prevent market rates from drifting materially below the
policy rate. Ongoing growth-support measures — including accelerated government
bond issuance and expedited deployment of 800 billion yuan in new policy
financial instruments — will require continued PBOC liquidity support.
