The 2026 Financial Street Forum annual meeting opened on October 19 in Beijing under the theme "Openness, Cooperation and Inclusiveness 鈥?Building a New Ecosystem for Global Financial Development." Pan Gongsheng, Governor of the People's Bank of China, attended the opening ceremony and delivered a keynote speech.
Overnight repo rate to become the primary policy rate
Pan Gongsheng said the interbank overnight repurchase rate, commonly known as DR001, is the most active and benchmark-setting rate in money market trading, reflecting short-term funding supply and demand in a responsive manner, and has become more stable in recent years. Under current conditions, the interbank overnight repo rate has in effect become the target rate for the central bank's monetary policy operations. At the same time, the main tenor of the PBOC's open market operations and its main policy rate remains seven days, creating a mismatch. To further improve the precision of interest rate regulation, the PBOC will study the appropriate timing to switch the tenor of its main open market operation instrument to overnight, and the open market overnight repo rate will accordingly become the primary policy rate.
Policy guidance to be issued in due course to advance reform of the loan pricing benchmark
Pan Gongsheng said the PBOC will push forward reform of the loan interest rate pricing benchmark, shifting from a relatively单一 reliance on the loan prime rate (LPR) toward a more diversified set of pricing benchmarks. As the diversified loan pricing framework improves, financially strong enterprises may, after consultation with financial institutions, independently choose the interbank overnight repo rate or the LPR as the benchmark for floating-rate loans, while the LPR can continue to serve as the pricing benchmark for small business and personal loans. The interbank overnight repo rate could also be considered as a pricing benchmark for bonds and financial derivatives. The PBOC will issue policy guidance in due course to direct financial institutions in the relevant work. It will also continue to reform and improve the LPR quotation mechanism and raise quotation quality.
Benchmark deposit and lending rates to be retired
Pan Gongsheng said that as interest rate marketization advances, the benchmark deposit and lending rates are gradually being replaced by market-based pricing benchmarks. Bank lending rates already have multiple benchmarks including the LPR and the interbank overnight repo rate. Starting in the first quarter of this year, the PBOC began publishing average deposit rates across various tenors as a reference for bank deposit pricing. Next, the PBOC will promote the replacement of interest calculation bases in these areas with market-based interest rate indicators, achieving the retirement of benchmark deposit and lending rates for financial institutions.
Interconnection between interbank and exchange bond markets to be implemented
Pan Gongsheng said the PBOC will push for the implementation of interconnection between the interbank and exchange bond markets. Connectivity between financial market infrastructures can facilitate cross-market bond issuance and trading, enhance market liquidity and price formation, and give better play to the role of financial markets in price discovery and resource allocation. The PBOC and the China Securities Regulatory Commission have carried out a series of work, and conditions for interconnection are now in place; it can be launched after testing.
Global demand for the renminbi has risen notably; central bank to strengthen high-quality policy supply
Pan Gongsheng said that driven by market demand and combined with changes in the international environment and geopolitical landscape, global demand for the use of the renminbi has increased markedly. Next, the PBOC will further strengthen high-quality policy supply: first, better serve the real economy and facilitate trade and investment; second, enrich the supply of high-quality renminbi assets globally and invigorate offshore renminbi financial product trading; third, provide stable, multi-tiered renminbi liquidity supply to offshore markets.
Pilot to further facilitate overseas financial institutions' renminbi purchase and sale business in onshore FX market
Pan Gongsheng said a pilot program will further facilitate overseas financial institutions' renminbi purchase and sale business in the onshore foreign exchange market. The plan is to allow eight Chinese and foreign renminbi overseas clearing banks to conduct proprietary trading in the onshore interbank foreign exchange market in accordance with international financial market practices and trading conventions. Follow-up efforts will further expand foreign exchange market opening based on the pilot's results.
Financial support for the development of the artificial intelligence industry
Pan Gongsheng said the rapid global development of artificial intelligence has profound implications for productivity, investment, employment, income distribution and financial stability. From the PBOC's perspective, it will closely track and assess the macroeconomic impact of AI development, do a good job in providing financial support for the AI industry, and steadily advance the application of AI in the financial sector.
Foreign-funded renminbi clearing banks to be included in the repo tool support scope for overseas central bank-type institutions
Pan Gongsheng said foreign-funded renminbi clearing banks are planned to be included in the support scope of the repo tool for overseas central bank-type institutions, which will help foreign clearing banks better serve overseas renminbi business. Pan Gongsheng noted that the digital renminbi operations management center established in Beijing last year has been fully operational, becoming a comprehensive digital renminbi business platform integrating issuance management, retail, wholesale, blockchain and smart contract services. The number of digital renminbi business operators has expanded from 10 to 30, covering all systemically important banks.
Positive progress in the transformation and improvement of China's monetary policy framework
Pan Gongsheng said that over the past two years and more, the PBOC has done considerable work and made positive progress. It has clarified the policy rate status of the seven-day reverse repo rate in open market operations, added an overnight operation instrument, and conducted outright purchases and sales of government bonds in the open market, further enriching the monetary policy toolbox and making the market-based interest rate regulation mechanism clearer. At the same time, it has continuously strengthened the implementation and supervision of interest rate policy, standardized deposit and loan pricing behavior, enhanced banks' pricing capabilities, optimized the structural monetary policy toolkit and its elements, strengthened coordination with fiscal and industrial policies, and placed greater emphasis on market communication and expectation guidance.
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