PBoC Shifts Primary Policy Anchor to Overnight Reverse Repo Rate

The People's Bank of China $PBOC has shifted its primary policy anchor to the overnight reverse repo rate at 1.25%, signaling easier funding conditions ahead. This structural change to China's monetary policy transmission mechanism reflects efforts to support economic activity.

The move comes as China's manufacturing PMI weakness persists, with official NBS data showing a drop to 49.3 in October despite private surveys indicating some resilience. Asian equities have responded positively to reports of policy support measures.

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