China's Interest Rate Corridor

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This page shows China's interest rate corridor: the SLF 7-day rate (Standing Lending Facility, 常备借贷便利) as the ceiling, the IOER (Interest on Excess Reserves, 超额准备金利率) as the floor, the 7-day reverse repo rate as the policy anchor at the center, and market rates such as FDR007 trading inside the band.

What each series means:

• SLF 7D Ceiling — the rate at which commercial banks can borrow from the PBOC on demand against eligible collateral; the corridor's ceiling: once market rates exceed it, banks borrow from the central bank instead, capping the upside.
• 7D Reverse Repo Rate — the rate at which the PBOC injects 7-day funds to primary dealers in open market operations; designated the primary policy rate since 2024, anchoring the middle of the corridor.
• 7D Reverse Repo Volume — daily operation size (CNY 100mn, bars on the right axis), gauging the scale of PBOC liquidity injections.
• IOER Floor — what banks earn on excess reserves parked at the PBOC; the corridor's floor: below it, banks would rather leave cash at the central bank, so rates struggle to fall further.
• FDR001 / FDR007 / FDR014 (Fixing Depository-institutions Repo, since May 2017) — the median of 9:00–11:30 a.m. pledged-repo trades among depository institutions collateralized by rates bonds (the DR universe), fixed daily for overnight / 7-day / 14-day tenors. FDR007 is the daily fixing proxy for DR007, the PBOC's operating target — the first line to watch for where market rates sit inside the corridor.
• FR001 / FR007 / FR014 (Fixing Repo, since 2006) — same methodology but sampling the whole market, including non-banks (brokers, funds, wealth-management products). FR007 is also the reference rate for RMB interest-rate swaps. The FR007 − FDR007 spread measures liquidity stratification: a wider gap means cash is stuck inside the banking system while non-banks pay up for funding.
• SHIBOR O/N–1Y — quoted (not traded) rates for unsecured interbank lending from an 18-bank panel, LIBOR-style, across eight tenors from overnight to 1 year. The short end follows funding conditions; 3M+ tenors reflect banks' expected liability costs. Being quotes, their spikes in stress episodes are more muted than repo fixings.

Why it matters: When FDR007 or other market rates approach the SLF ceiling, it signals tight liquidity and potential stress. When they fall near the IOER floor, excess liquidity is abundant. The width and positioning of market rates within the corridor reveal the PBOC's effective monetary stance, analogous to the Fed Funds Rate within the FFR target range in the US.

Framework evolution: Since 2024 the PBOC has made the 7-day reverse repo rate its explicit primary policy rate (retiring the MLF from that role) and introduced temporary overnight repo/reverse-repo facilities that confine the overnight rate to roughly policy −20bp / +50bp — a much narrower effective corridor, moving the PBOC toward Fed-style precision control of the short end. For day-to-day monitoring, DR007 (the interbank pledged-repo rate for depository institutions) is the de facto operating target — FDR007 on this page is its daily fixing proxy — and the direction and persistence of its deviation from the 7-day OMO rate is the cleanest single read on the PBOC's marginal stance.