Expert: Short-term policy interest rate control framework will be clearer

PBOC Governor Pan Gongsheng previously mentioned the future monetary policy framework, suggesting that it may consider specifying a certain short-term operating interest rate of the central bank as the main policy rate. "This means that there will be a significant transformation in the future framework of China's monetary policy regulation." Authoritative experts stated that the main policy rate will be clearly defined as the interest rate of the central bank's short-term operational tool. China has short-term policy rates, namely open market operation rates, which are similar to those internationally, where central banks of developed economies mainly focus on short-term rates. At the same time, China also has medium-term policy rates.

"The central bank needs to have a target rate to measure whether the short-term rate regulation has achieved its goal." Authoritative experts stated that central banks of developed economies mainly focus on overnight rates, for example, the Federal Reserve looks at the effective federal funds rate. Currently, the People's Bank of China mainly focuses on the 7-day interbank repurchase rate, namely DR007, but is also increasingly looking at the overnight repurchase rate DR001. The overnight repurchase transaction volume is higher and more representative, so it can also be considered to develop in this direction in the future. (Securities Times)