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China Maintains Benchmark Lending Rates
(RTTNews) - China left its benchmark lending rates unchanged for the fifth straight month, as widely expected, on Thursday.
The People's Bank of China kept its one-year loan prime rate unchanged at 3.10 percent. Likewise, the five-year LPR, the benchmark for mortgage rates, was retained at 3.60 percent.
Both the rates were last reduced by 25 basis points each in October 2024.
The announcement came after the US Federal Reserve left its interest rate unchanged on Wednesday. But the Fed signaled that it is still likely to lower rates later this year.
The PBoC fixes the LPR monthly based on the submission of 18 designated banks. However, Beijing has influence over the fixing. The LPR replaced the traditional benchmark lending rate in August 2019.
The weakness of yuan currently limits the capability to ease monetary policy further. Early this month, PBoC Governor Pan Gongsheng said the bank aims to maintain the yuan basically stable at a reasonable and balanced level.
The PBoC had pledged to lower interest rates and the reserve requirement ratio to prop up economic growth.
China retained its growth target for 2025 at "around 5 percent" but the government was more cautious about nominal growth and inflation outlook amid heightened uncertainty surrounding the U.S trade tariff threats.
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