PBoC to maintain benchmark lending rates unchanged for 2nd meeting

(MENAFN) On Friday, the People's Bank of China (PBoC) decided to keep its benchmark lending rates unchanged for the second consecutive meeting, a move in line with market expectations. The one-year loan prime rate (LPR), which influences corporate and household loans, remained at 3.10 percent. Similarly, the five-year LPR, used as a benchmark for mortgages, stayed at 3.6 percent. These rates continue to be at historically low levels, following earlier reductions in July and October.

This decision coincided with the US Federal Reserve's widely anticipated 25-basis-point rate cut on Wednesday, which also included signals that the Fed plans to implement only two rate cuts in 2025, a reduction from the four previously projected in its September outlook. The global context of interest rate decisions has added pressure to central banks worldwide as they navigate their own economic challenges.

Earlier this month, Chinese policymakers reaffirmed their commitment to monetary easing during key economic meetings, pledging additional measures to stimulate economic growth. These measures could include further interest rate cuts, underscoring China’s focus on addressing its economic slowdown and supporting both corporate investment and household spending.

The steady rates from the PBoC reflect the central bank’s cautious approach, balancing the need for monetary easing to boost growth while managing the risks of further economic imbalances. Market observers will continue to monitor any signs of additional policy actions in the coming months.

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