The People’s Bank of China will shift its short-term monetary policy framework toward the overnight rate from Monday, introducing daily overnight reverse repo operations at a fixed rate of 1.25%. The move brings the overnight rate closer to becoming its main policy anchor, replacing the long-standing seven-day benchmark. The operations will use fixed-rate, quantity-based tenders to improve short-term interest rate management. The 1.25% rate, disclosed for the first time, is below the existing 1.4% seven-day reverse repo rate and broadly aligns with market expectations and actual borrowing costs. Under the revised framework, other liquidity tools, including temporary repo and reverse repo operations, will also be priced off the overnight rate, with existing spreads unchanged. Seven-day operations will continue but shift to fixed-quantity tenders with multiple winning bid rates, mainly serving liquidity needs around tax payment periods and month-ends.