FX.co ★ China Holds LPR Rates Steady as Expected

The People’s Bank of China (PBoC) upheld key lending rates at historically low levels during the June session, aligning with market forecasts. This decision follows last month's reduction in borrowing costs by 10 basis points, an effort to mitigate the economic repercussions of new U.S. tariffs. Major state-owned banks subsequently lowered deposit rates. Despite the challenges posed by these tariffs, mixed economic indicators suggest that China remains on course to achieve its GDP growth objectives. Retail sales climbed at their fastest rate in 15 months as of May 2025, while industrial production experienced its slowest increase in six months, and new bank lending fell short of expectations. The one-year loan prime rate (LPR) — the standard reference for most business and consumer loans — was maintained at 3.0%, and the five-year LPR, instrumental in setting mortgage rates, held steady at 3.5%.