China shifts to short-term tools in monetary policy overhaul: Nomura
China is reshaping its monetary policy, shifting from the medium-term lending facility to short-term tools like the 7-day reverse repo rate. The PBoC is creating a narrower interest rate corridor and using DR001 as a key benchmark. However, policy transmission remains weak, and open market operations are still developing amid lingering challenges.
The People's Bank of China (PBoC) has de-emphasised the one-year medium-term lending facility (MLF), instead elevating the seven-day open market operations (OMO) reverse repo rate as the primary policy rate, according to Nomura.
To enhance clarity and improve rate transmission, the PBoC is establishing a narrower interest rate corridor with temporary overnight repo rates acting as the floor and reverse repo rates as the ceiling. The DR001 rate—overnight repo for depository institutions—has emerged as a key interbank benchmark.
The shift comes amid growing limitations of the MLF, which has constrained bond market liquidity by tying up large volumes of Chinese government bonds (CGBs) at the central bank. In response, the PBoC resumed direct CGB trading and launched outright reverse repos to manage liquidity more efficiently.
Despite this shift, challenges remain. The PBoC does not commit to unlimited lending at the corridor's ceiling. Transmission from policy and interbank rates to bank lending and deposit rates remains weak, with window guidance still critical. Open market operations are also in a formative stage, as shown by the suspension of CGB purchases shortly after resumption.
Fibre2Fashion News Desk (HU)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India.com
2 hours ago
- India.com
After Pakistan, China plans to capture THIS African country in its debt-trap, Chinese companies to invest Rs 30521037715 for...
(File) China debt-trap: China, which has the mastered the art of gaining a giant foothold in smaller, economically weaker countries by making large investments in its various sectors, has now set its sights on Angola as two Chinese companies have signed deals to acquire land to grow food grains in the African country at an investment of $350 million (about Rs 3,052 crore). Where is China investing? According to a media report, the state-owned Chinese firms will invest Rs 3052 crore in Angola, to cultivate soybean, maize and other grains on thousands of hectares of land, a portion of which will be shared with the host country. The project is aimed at reduce China's dependence for food grains on the United States and Brazil. Notably, in recent years, China has invested in similar projects in other African countries including Tanzania, Ethiopia and Benin, as it pushes to end dependence on food exports from the West. Which companies are investing in Angola? As per a report by the South China Morning Post, two state-owned companies– SinoHydro Group and Citic Group — have signed agreements to invest in Angola. The SinoHydro Group has been leased 30,000 hectares of tax-free land for 25 years, up which it will cultivate food grains, with 60% of the produce going directly to China. The Citic Group will invest $250 million in the next 5 years and cultivate soybean and corn on a massive 100, 000 hectares of land, the report said, adding that work has already begun on 8,000 hectares. How China is luring African countries? According to experts, China is offering a major relief to African countries after US President Donald Trump imposed heavy tariffs on their export. Earlier, in June, Beijing announced to eliminate import duties on goods coming from nearly all of its African partners, providing these nations with a never-before opportunity to strengthen South-South trade, as per a CNN report. Why China is investing in Africa? However, many geopolitical analysts are skeptical of China's growing investments in Africa, stating that Beijing's goals are strategic and go well beyond the noble aim of ensuring food security. Several experts claim that China is taking tax-free land on a long lease period to strengthen its hold in Africa and reduce imports from the West, particularly the US. Before the farming deal, China and Angola had an 'infrastructure for oil' exchange deal, but now the African country has shifted focus to agriculture to ensure its economy does not remain dependent on a single resource.
Time of India
2 hours ago
- Time of India
Mistral in talks with VC firms, MGX to raise funds at $10 billion valuation: Report
Academy Empower your mind, elevate your skills French artificial intelligence startup Mistral is in talks with investors, venture capital firms and Abu Dhabi's MGX to raise $1 billion at a valuation of $10 billion, the Financial Times reported on Friday, citing people familiar with the company launched in June Europe's first AI reasoning model , which uses logical thinking to create a response, as it tries to keep pace with American and Chinese rivals at the forefront of AI funding would accelerate the commercial rollout of Mistral's Le Chat chatbot and support continued development of its large language models, the report and Mistral did not immediately respond to Reuters requests for startup raised 600 million euros in a Series B funding round that valued the company at 5.8 billion euros last observers consider Mistral as Europe's best-positioned AI company to rival Silicon Valley leaders, though the French firm has yet to achieve comparable market traction or revenue counts Nvidia, Andreessen Horowitz and Lightspeed Venture Partners among its investors.
Time of India
3 hours ago
- Time of India
Kuwait introduces new e-Visa for four visa categories; no embassy visit needed
In a recent update, Kuwait has officially launched and went live with its complete online e‑Visa platform for four visa categories, including tourist, family, business, and official. This is a big leap forward in the country's digital transformation under its Vision 2035 initiative. With this new change, citizens of several Western, Asian, and GCC‑residents will be able to complete the entire visa process remotely. They won't even have to step inside an embassy for a visa. Let's have a closer look at the whole process: Fully Online visa types: Now people can apply visa under: Tourist visas : This visa remains valid up to 90 days. It is perfect for those wanting to explore Kuwait. Family visas : This will allow close relatives of Kuwaiti residents to visit for up to 30 days. Business visas : This visa is also for up to 30 days. Now this one is perfect for professionals attending meetings, trade events or negotiations. Official visas : This is perfect for diplomats and government delegations on formal missions. Eligibility Citizens from over 50 countries across Europe, North America, Australia, Japan, and numerous Asian nations are eligible. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 22 Illustrations of a Husband and Wife in Everyday Life Watch More Undo GCC resident expatriates who have held valid residency for at least six months. It includes professions such as lawyers, doctors, engineers, teachers, journalists, and business managers. GCC citizens enjoy visa‑free entry using their national ID cards. They do not require any visa. How to apply Interested people can register via the Ministry of Interior's official portal (e.g. or Kuwait Visa platform linked from government websites). They need to: Create an account Log in with government credentials Choose desired visa category Upload required documents (passport bio‑page, photo, travel itinerary, accommodation or invitation, sponsor or official letter where required) Pay the fee online (typically USD 10–30 or about 3 KWD depending on nationality and category) Submit and track the application by reference code or passport number You'll receive the approved e‑Visa via email. You can get it printed or it is usable on a mobile device upon arrival. The processing usually takes between 1 and 3 business days. Delay is possible during peak travel season. Things to Remember Valid passport Provide clear documents—especially photos meeting portal specifications. Apply at least one week before travel. For family and business visas, make sure Kuwait‑based sponsors are aware of their responsibilities. If e‑Visa is refused, you may still be eligible for visa-on-arrival depending on nationality and category. The best part of this is that people don't require embassy visits. The paperwork has also reduced and its speedy approvals. With this new introduction, Kuwait aims to boost inbound tourism, attract international business, and strengthen political relationships with other nations. Get the latest lifestyle updates on Times of India, along with Friendship Day wishes , messages and quotes !
