China’s central bank opted to leave its key lending rates unchanged for the fourth straight month, maintaining a cautious stance even as the U.S. Federal Reserve moved to lower interest rates last week.
The People’s Bank of China announced on Monday that the one-year loan prime rate (LPR) would remain at 3.0%, while the five-year LPR was kept at 3.5%, according to the central bank’s latest statement. The one-year LPR serves as a reference for most new and outstanding loans, and the five-year rate is widely used to determine mortgage pricing.
The decision matched expectations among economists, who had anticipated that Chinese officials would refrain from introducing significant stimulus measures at this time. Authorities are likely weighing their options after a recent upswing in stock markets, despite recent economic indicators pointing to persistent challenges within the economy.
According to the source, the LPR serves as a critical benchmark: most business and consumer lending—excluding mortgages—track the one-year rate, while the five-year LPR guides mortgage rates.
