The People's Bank of China announced six policy measures at the opening of the 2026 Lujiazui Forum in Shanghai on June 17.

1. Improving short-term interest rate regulation

To further advance the transition toward a more price-based monetary policy framework and make short-term interest rate regulation more precise and effective, the central bank will further refine and optimize its interest rate regulation mechanism.

Building on the temporary overnight repo and reverse repo operations introduced in July 2024, it will improve the use of these tools and set rates on the repo and reverse repo operations at 25 basis points below and above the seven-day reverse repo rate, respectively. This will narrow the interest rate corridor from 70 basis points to 50 basis points.

The central bank will also expand its open market operations toolkit and add overnight reverse repo operations when appropriate to better meet short-term liquidity demand in the banking system.

2. Establishing a renminbi repo facility for foreign and international monetary authorities

The central bank will establish an RMB Repo Facility for Foreign and International Monetary Authorities, or FIMA RMB Repo.

Foreign central banks and monetary authorities, international financial organizations, and sovereign wealth funds will be able to obtain RMB liquidity from the central bank through repo transactions backed by Chinese government bonds and other high-grade bonds.

The facility will help eligible institutions manage their RMB liquidity and RMB asset allocation.

3. Piloting offshore RMB foreign exchange trading in Shanghai FTZ

An offshore RMB foreign exchange trading pilot will be launched in the China (Shanghai) Pilot Free Trade Zone to promote the two-way opening-up of the foreign exchange market and greater integration between the onshore and offshore markets.

Six banks — Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and China CITIC Bank — will be authorized to conduct offshore RMB foreign exchange transactions through the China Foreign Exchange Trade System.

The pilot will support Shanghai's development as a global center for RMB asset allocation and risk management. The central bank will further develop the offshore RMB foreign exchange market based on the results of the pilot operations.

4. Studying a macroprudential liquidity support tool for non-bank institutions under specified circumstances

The central bank will study the establishment of a macroprudential liquidity support tool for non-bank financial institutions under specified circumstances.

The tool could provide emergency liquidity through swap transactions when markets such as the bond market face systemic pressure, normal liquidity channels are disrupted, and multiple institutions face liquidity crises that could trigger systemic risk.

It would not provide routine liquidity support to non-bank financial institutions. Non-bank institutions conducting transactions with the central bank would have to meet macroprudential requirements and provide high-grade collateral.

The mechanism will be designed to maintain financial market stability while preventing moral hazard.

5. Developing offshore finance in Shanghai

The central bank will work with the Shanghai Municipal People's Government and relevant authorities to issue the Action Plan for Developing Offshore Finance in the Shanghai International Financial Center.

The plan will gradually improve the institutional framework for offshore finance, covering business rules, risk management, and the business environment.

It will steadily develop offshore finance in areas including FTZ offshore bonds, offshore trade finance services, and international treasury centers, supporting Shanghai's efforts to build an offshore financial business system commensurate with its status as an international financial center.

6. Launching an inter-bank market data reporting repository

An inter-bank market data reporting repository has been launched. By centrally collecting transaction, custody, and settlement data, the repository will strengthen look-through monitoring of financial markets and better serve both regulatory and market needs.

The Shanghai e-CNY International Operations Center, announced at last year's Lujiazui Forum, is now fully operational. The comprehensive cross-border e-CNY settlement service platform, known as Cross-border e-CNY Transfer Services, has also officially gone online.

Source: The People's Bank of China