China’s central bank maintained its key lending rates on Tuesday, extending its pause on policy adjustments for the tenth consecutive month. The decision comes as policymakers balance the need for economic stimulus with efforts to keep the yuan stable.
The People’s Bank of China kept the one-year loan prime rate at 3.0% and left the five-year rate at 3.5%. The one-year LPR shapes interest rates for most new and outstanding loans, while the five-year rate is used as a benchmark for mortgages.
Despite signs of slowing economic momentum, authorities refrained from easing policy further. China’s economy grew by 4.5% year-on-year in the last quarter of 2025, marking the slowest quarterly growth since pandemic restrictions were removed in late 2022.
Recent months have seen the Chinese yuan gain ground against the U.S. dollar, with the offshore rate appreciating from 6.97 at the start of the year to 6.89 as of Tuesday, based on LSEG data. The central bank has allowed the currency to strengthen gradually, benefiting from U.S. dollar softness.
The PBOC manages the yuan within a daily band of 2% above or below an official midpoint. In late January, this central-fixing rate moved below the symbolic 7-yuan-per-dollar mark for the first time in nearly three years, signaling a shift in official stance.
The central bank’s current approach reflects ongoing efforts to steer the economy through a period of slower growth without triggering excessive currency volatility.
