The People’s Bank of China (PBoC) last week expanded its monetary toolkit in an effort to strengthen its day-to-day management of market interest rates. However, analysts say that although this could help smooth volatility in short-term rates, it does not imply a major change to the country’s monetary policy framework.

On July 8, the PBoC announced it would start conducting overnight repurchase (repo) agreements or reverse repo operations on a temporary basis during weekday afternoons, as