The People’s Bank of China (PBOC) formally shifted its main policy-rate anchor toward the overnight rate on November 2, injecting CNY 541 billion (about $81.3 billion) through overnight reverse repurchase agreements at 1.25%. The central bank said it would conduct daily overnight reverse repos at the fixed rate, while seven-day operations would use multiple rates rather than a single fixed benchmark, gradually reducing the role of the long-standing seven-day rate. The newly disclosed overnight rate is below the existing 1.4% seven-day reverse repo rate and broadly matches market expectations and prevailing funding costs. The move lowered the floor of China’s interest-rate framework by 15 basis points, potentially reducing financial institutions’ funding costs and bond yields, although it was not a conventional policy-rate cut. China’s 10-year government bond yield fell to around 1.64%, reversing the previous session’s advance. The offshore yuan strengthened to around 6.64 per dollar, extending its advance to five sessions and reaching its strongest level since June 2022. The transition came as credit concerns involving state-owned developer Zhuhai Huafa Group unsettled bond markets. Regulators, including the PBOC, were due to meet financial institutions to discuss tools supporting capital markets. Citi analysts said an LPR cut in November was unlikely and identified 2027 as the more likely window for rate cuts, while renewed credit concerns supported continued local debt-resolution efforts and loose liquidity conditions. Economic data remained weak: manufacturing PMI fell to 49.3 in October 2026 from 50.1 in September, while non-manufacturing PMI declined to 49.7 from 50.2, marking contraction for the sixth time in 2026.