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China Keeps LPR Rates Steady for Third Month
The People’s Bank of China (PBOC) maintained key lending rates at record lows for the third consecutive month during the August fixing, in line with market expectations. The decision came despite recent economic data suggesting that the economy might be losing momentum. The one-year Loan Prime Rate (LPR)—the benchmark for most corporate and household loans—was kept steady at 3.0%, while the five-year LPR, which guides mortgage rates, remained unchanged at 3.5%. Data released last week showed that industrial output grew at its slowest pace in eight months in July, while retail sales posted their weakest growth since December 2024. Meanwhile, new yuan loans fell for the first time in 20 years, coming in well below analysts’ expectations, although broader credit growth showed some improvement. In its latest quarterly monetary policy implementation report, the central bank stated it would continue to implement and fine-tune a moderately loose monetary policy.
Published on 2025-08-20

PBoC Vows Targeted Support for China’s Economy
The People’s Bank of China reaffirmed its commitment to “thoroughly” implement a “moderately loose” monetary policy, emphasizing selective support for the economy, according to its quarterly report released last Friday. The pledge comes amid signs of weakening momentum in July, as domestic efforts to curb overcapacity and rising U.S. tariffs weigh on growth. While acknowledging challenges such as increasing trade barriers and sluggish domestic demand, the central bank stressed that China’s economic “foundation is solid and its resilience is strong.” On deflation, an issue that has lingered for over two years, the PBoC noted recent improvements in the core consumer price index, which excludes food and energy, suggesting early signs of stabilization.
Published on 2025-08-18

PBoC Vows Targeted Support for China’s Economy
The People’s Bank of China reaffirmed its commitment to “thoroughly” implement a “moderately loose” monetary policy, emphasizing targeted support for the economy, according to its quarterly report released last Friday. The pledge comes amid signs of weakening momentum in July, as domestic efforts to curb overcapacity and rising U.S. tariffs weigh on growth. While acknowledging challenges such as increasing trade barriers and sluggish domestic demand, the central bank stressed that China’s economic “foundation is solid and its resilience is strong.” On deflation—an issue that has lingered for over two years—the PBoC noted recent improvements in the core consumer price index, which excludes food and energy, suggesting early signs of stabilization.
Published on 2025-08-18

PBoC Vows Targeted Support for China’s Economy
The People’s Bank of China reaffirmed its commitment to “thoroughly” implement a “moderately loose” monetary policy, emphasizing selective support for the economy, according to its quarterly report released last Friday. The pledge comes amid signs of weakening momentum in July, as domestic efforts to curb overcapacity and rising U.S. tariffs weigh on growth. While acknowledging challenges such as increasing trade barriers and sluggish domestic demand, the central bank stressed that China’s economic “foundation is solid and its resilience is strong.” On deflation—an issue that has lingered for over two years—the PBoC noted recent improvements in the core consumer price index, which excludes food and energy, suggesting early signs of stabilization.
Published on 2025-08-18

China Holds LPR Rates Steady for 2nd Month
The People’s Bank of China kept key lending rates at record lows during the July fixing, in line with expectations. The decision came amid mounting signs of slowing growth momentum, weighed down by sweeping US tariffs, sluggish domestic demand, and a prolonged property slump. The one-year loan prime rate (LPR)—the benchmark for most corporate and household loans—was held steady at 3.0%, while the five-year LPR, which guides mortgage rates, remained unchanged at 3.5%. Data released last week showed GDP grew by 5.2% in Q2, slightly above expectations of 5.1%, though down from 5.4% growth in each of the previous two quarters. For H1 of 2025, the economy expanded by 5.3%, even as deflationary pressures persisted, with producer prices falling the most since July 2023. Meanwhile, new bank lending exceeded expectations, reaching its highest level in three months. In May, the central bank cut borrowing costs by 10 basis points to help cushion the economy from the impact of US tariffs.
Published on 2025-07-21

China Holds LPR Rates Steady for 2nd Month
The People’s Bank of China kept key lending rates at record lows during the July fixing, in line with expectations. The decision reflects continued signs of resilience in the economy, though rising external risks—particularly from newly imposed US tariffs—remain a concern. The one-year loan prime rate (LPR)—the benchmark for most corporate and household loans—was held steady at 3.0%, while the five-year LPR, which guides mortgage rates, remained unchanged at 3.5%. Data released last week showed GDP grew by 5.2% in Q2, slightly above expectations of 5.1%, though down from 5.4% growth in each of the previous two quarters. For H1 of 2025, the economy expanded by 5.3%, even as deflationary pressures persisted, despite CPI rising in June for the first time in five months. Meanwhile, new bank lending exceeded expectations, reaching its highest level in three months. In May, the central bank cut borrowing costs by 10 basis points to help cushion the economy from the impact of US tariffs.
Published on 2025-07-21

China Holds LPR Rates Steady for 2nd Month
The People’s Bank of China kept key lending rates at record lows during the July fixing, in line with expectations. The decision reflects continued signs of resilience in the economy, though rising external risks—particularly from newly imposed US tariffs—remain a concern. The one-year loan prime rate (LPR)—the benchmark for most corporate and household loans—was held steady at 3.0%, while the five-year LPR, which guides mortgage rates, remained unchanged at 3.5%. Data released last week showed GDP grew by 5.2% in Q2, slightly above expectations of 5.1%, though down from 5.4% growth in each of the previous two quarters. For H1 of 2025, the economy expanded by 5.3%, even as deflationary pressures persisted, with producer prices falling the most since July 2023. Meanwhile, new bank lending exceeded expectations, reaching its highest level in three months. In May, the central bank cut borrowing costs by 10 basis points to help cushion the economy from the impact of US tariffs.
Published on 2025-07-21

China Holds LPR Rates Steady as Expected
The People’s Bank of China (PBoC) kept key lending rates at record lows during the June fixing, in line with market expectations. The move came after the central bank reduced borrowing costs by 10 basis points last month to help cushion the economy from the impact of new US tariffs, and was followed by recent deposit rate cuts by major state-owned banks. The decision came amid mixed economic data suggesting the country remains on track to meet its GDP growth target despite facing new US tariffs. Retail sales grew at the fastest pace in 15 months in May 2025, while industrial output rose at the slowest rate in six months, and new bank lending increased less than expected. The one-year loan prime rate (LPR)—the benchmark for most corporate and household loans—was held steady at 3.0%, while the five-year LPR, which guides mortgage rates, remained unchanged at 3.5%.
Published on 2025-06-20

China Holds LPR Rates Steady as Expected
The People’s Bank of China (PBoC) kept key lending rates at record lows during the June fixing, in line with market expectations. The move came after the central bank reduced borrowing costs by 10 basis points last month to help cushion the economy from the impact of new US tariffs, and was followed by recent deposit rate cuts by major state-owned banks. The one-year loan prime rate (LPR)—the benchmark for most corporate and household loans—was held steady at 3.0%, while the five-year LPR, which guides mortgage rates, remained unchanged at 3.5%.
Published on 2025-06-20

China Holds LPR Rates Steady as Expected
The People’s Bank of China (PBoC) kept key lending rates at record lows during the June fixing, in line with market expectations. The move came after the central bank reduced borrowing costs by 10 basis points last month to help cushion the economy from the impact of new U.S. tariffs, and was followed by recent deposit rate cuts by major state-owned banks. The decision came amid mixed economic data suggesting the country remains on track to meet its GDP growth target despite facing new US tariffs. Retail sales grew at the fastest pace in 15 months in May 2025, while industrial output rose at the slowest rate in six months, and new bank lending increased less than expected. The one-year loan prime rate (LPR)—the benchmark for most corporate and household loans—was held steady at 3.0%, while the five-year LPR, which guides mortgage rates, remained unchanged at 3.5%.
Published on 2025-06-20

China Lowers Lending Rates for First Time Since October
The People's Bank of China (PBoC) cut key lending rates to new lows at the May fixing, in line with market expectations and marking the first reduction since last October. The move follows Beijing’s sweeping monetary easing measures announced earlier this month, including interest rate cuts and a major liquidity injection, to bolster the sluggish economy and cushion potential fallout from the ongoing trade tensions with the U.S. The one-year loan prime rate (LPR), the benchmark for most corporate and household loans, was reduced by 10 basis points to 3.0%, and the five-year LPR, which guides mortgage rates, was cut by the same margin to 3.5%. Meanwhile, several of China’s largest state-owned banks also cut deposit interest rates, aiming to ease pressure from narrowing interest margins as the government steps up monetary easing efforts to boost economic activity.
Published on 2025-05-20

China Keeps LPR Rate Steady for 6th Month
The People's Bank of China (PBoC) left its key lending rates unchanged for the sixth consecutive month in April, aligning with market expectations as the central bank waits to assess the evolving impact of U.S. trade disputes before introducing further stimulus. The one-year loan prime rate (LPR), a benchmark for most corporate and household loans, was maintained at 3.1%, while the five-year LPR, a reference for property mortgages, remained at 3.6%. Both rates are at record lows following reductions in October and July of last year. The latest decision came after GDP grew more than expected, at 5.4% year-on-year in Q1 of 2025, remaining the highest growth in one and a half years, amid Beijing's ongoing stimulus efforts. Beijing is prioritizing the boost of domestic consumption, including an additional CNY 300 billion in ultra-long special treasury bonds for a consumer goods trade program.
Published on 2025-04-21

China Holds LPR Rate Steady for 5th Month
The People's Bank of China (PBoC) maintained its key lending rates unchanged for the fifth consecutive month in March, in line with market expectations. The one-year loan prime rate (LPR), a benchmark for most corporate and household loans, was held at 3.1%, while the five-year LPR, a reference for property mortgages, remained at 3.6%. Both rates are at record lows following reductions in October and July last year. The latest decision followed the U.S. Fed’s move to hold key interest rates while signaling the possibility of two rate cuts later this year. Meanwhile, the PBoC recently said it would lower again interest rates and the bank's reserve requirement ratio at the appropriate time to reverse the sluggish economy. On the fiscal front, Beijing rolled out more stimulus measures earlier in the month to boost domestic demand and consumption, and mitigate the impact of rising tariffs imposed by the US Trump administration.
Published on 2025-03-20

China Holds LPR Rate Steady for 4th Month
The People's Bank of China (PBoC) kept its key lending rates unchanged for the fourth consecutive month in February, aligning with market expectations. The one-year loan prime rate (LPR), a benchmark for most corporate and household loans, was maintained at 3.1%, while the five-year LPR, a reference for property mortgages, remained at 3.6%. Both rates are at record lows following reductions in October and July last year. The decision came amid yuan fluctuations and US President Donald Trump's aggressive trade policy to boost the US economy through import taxes. Meanwhile, the PBoC recently stated it would tweak its monetary policy at the appropriate time to support the sluggish economy, including changes to interest rates and the bank reserve requirement ratio for commercial banks. Additionally, Beijing has committed to continuing a proactive fiscal policy this year, following a broader stimulus package introduced in September 2024.
Published on 2025-02-20

China Holds LPR Rate Steady for 3rd Month
The People’s Bank of China (PBoC) kept its key lending rates unchanged for the third consecutive month in January fixing, aligning with market expectations. The one-year loan prime rate (LPR), a benchmark for most corporate and household loans, was maintained at 3.1%, while the five-year LPR, which serves as a reference for property mortgages, was retained at 3.6%. Both rates are at record lows following rate reductions last year in October and July. However, the latest decision came amid renewed pressure on the yuan that limited the central bank's ability to ease further monetary policy, and growing caution about potential US policy shifts under the incoming Trump administration. On economic output, China's GDP grew by 5.4% yoy in Q4 2024, marking the fastest pace in 1-1/2 years, driven by a series of stimulus measures introduced since September. For the full year, the economy expanded by 5%, meeting the official target of around 5% but slowing from a 5.2% growth in 2023.
Published on 2025-01-20

China Keeps LPR Rates as Expected
The People’s Bank of China (PBoC) maintained its key lending rates steady for the second straight month at December fixing, aligning with market estimates. The one-year loan prime rate (LPR), the benchmark for most corporate and household loans, was held at 3.1%. Meanwhile, the five-year rate, a reference for property mortgages, was unchanged at 3.6%. Both rates remain at record lows following rate reductions in October and July. The latest decision followed a pledge from Chinese leaders in early December to increase the 2025 budget deficit to 4% of GDP, the highest on record, to spur an economic turnaround and stimulate consumption. They also vowed to shift monetary policy to a "moderately loose" stance next year, moving away from the current "prudent" approach to address the mounting challenges in the economy. A PBoC official recently indicated that the central bank sees more room to further reduce the RRR from the current average level of 6.6%.
Published on 2024-12-20

China to Cut Rates Next Year
China will cut interest rates and reserve requirements next year, the People’s Bank of China research bureau director Wang Xin said at an event on Saturday, as reported by Bloomberg, citing the 21st Century Business Herald. Wang said there is room to further reduce the RRR from the current average level of 6.6%. Friday's data showed that China’s banks extended CNY 580 billion in new yuan loans in November 2024, well below the market expectation of CNY 950 billion, and less than half of the CNY 1.170 trillion from the corresponding period of the previous year, highlighting weak credit demand in the mainland. Last Thursday, China said it would raise the budget deficit, issue more debt, and loosen monetary policy to maintain a stable economic growth rate. As Reuters reported, China's economy is expected to grow by about 5% this year, citing Han Wenxiu, the deputy director of the country's central Financial and Economic Affairs Commission.
Published on 2024-12-15

Chinese Politburo Unveils Loose Monetary Stance
The Chinese Politburo, which has a direct influence on the stance of the People’s Bank of China, stated that it will embrace a “moderately loose” strategy for monetary policy in 2025 in a readout preceding the Central Economic Work Conference. The move marked an aggressive shift from the characteristic “prudential” stance since 2011. Along with wording that foreshadows more fiscal stimulus, the government also pledged to support property and equity markets next year, magnifying signals that the government will accelerate its countercyclical support to China’s recent economic struggles, and maintain the ambitious 5% GDP growth target for next year. The move extends the CCP's growing effort to stimulate the Chinese economy following muted reactions to previous policies, but the market also sees the statement as an undercut to potential tariffs of 60% to the US following President-elect Trump's inauguration next month. In its November fixing, the PBoC held both LPRs at record lows.
Published on 2024-12-09

China Holds LPR Rates Steady as Expected
The People’s Bank of China (PBoC) retained its key lending rates at the November fixing, in line with market estimates. The one-year loan prime rate (LPR), the benchmark for most corporate and household loans, was maintained at 3.1%. Meanwhile, the five-year rate, a reference for property mortgages, was held at 3.6%. Both rates remain at record lows following rate reductions in October and July. The latest decision reflected the PBoC's ongoing assessment of existing stimulus measures. Since late September, Beijing has ramped up efforts to reverse an economic slowdown and achieve the 2024 growth target of around 5%, despite prolonged property sector weakness, low consumer and business confidence, and persistent deflation risks. The central bank is expected to launch more policy-easing measures in the coming months. In October, Governor Pan Gongsheng said the central bank might reduce the reserve requirement ratio by another 25 to 50bps by year-end, contingent on liquidity conditions.
Published on 2024-11-20

China Lowers LPR Rates to Fresh Record Lows
The People's Bank of China slashed key lending rates to new lows at the October fixing, intensifying efforts to support a weakening economy. The one-year loan prime rate (LPR), the benchmark for most corporate and household loans, was cut by 25bps to 3.1%, and the five-year rate, a reference for property mortgages, was reduced by the same margin to 3.6%. The lending rates were last cut in July. Monday's decision followed Governor Pan Gongsheng's indication last week that the LPR would be lowered by 20 to 25bps. He also suggested that the reserve requirement ratio (RRR) for commercial banks could be reduced further in Q4. Recently, the PBoC and the Ministry of Housing introduced a range of policies to ease the financial burden on property owners and regain public confidence. In September, China's central bank began its most aggressive stimulus measures since the pandemic, including measures to support the ailing property sector and boost consumption.
Published on 2024-10-21