1 Day
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الاقتصادية
Chinese banks use overnight rate for bond pricing
Chinese banks have begun pricing bonds based on the overnight funding cost (repo rate), in an effort to enhance the adoption of the repo rate as a key benchmark for the financial system. Banks such as China Merchants Bank and the Export-Import Bank of China have issued bonds linked to the overnight interest rate, reflecting the central bank’s approach to establishing this indicator as part of monetary policy reforms. This shift is expected to improve the flexibility of the People's Bank of China's monetary policy, provide more precise tools for liquidity management, and potentially enhance resource allocation efficiency while bringing China's monetary framework closer to international standards.
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