Experts: Do Not Equate PBOC Operational Mechanism Reform with Rate Cuts

On October 19, at the opening ceremony of the 2026 Financial Street Forum Annual Meeting, PBOC Governor Pan Gongsheng clarified that the interbank overnight reverse repo rate has become the target rate for monetary policy regulation. Market experts note that the PBOC's shift in its primary open market operation instrument is part of a broader monetary policy framework reform and should not be conflated with typical interest rate cuts or hikes; the focus remains on refining operational mechanisms. Wang Jian, Chief Analyst in the Financial Industry at Guosen Securities Economic Research Institute, stated that as overnight operations become routine, the policy rate may transition from seven-day to overnight, but this does not equate to a rate cut. Guo Lei, Chief Economist at Guangfa Securities, added that the PBOC is continuously improving its monetary policy framework, with institutional designs following a consistent path toward a price-based framework; markets should avoid speculating on rate cuts based solely on these operational reforms. (Caixin)