FX.co ★ China Holds LPR Rates Steady for 6th Month

The People's Bank of China (PBoC) maintained its key lending rates at historic lows for the sixth straight month in November, aligning with market predictions. This decision followed the central bank's earlier choice to keep the seven-day reverse repo rate steady this month, currently serving as the primary policy rate, after indicating a reduced urgency for further monetary stimulus due to easing tensions between China and the United States. The one-year Loan Prime Rate (LPR), which serves as the benchmark for most corporate and household loans, remained fixed at 3.0%. Meanwhile, the five-year LPR, crucial for determining mortgage rates, stayed at 3.5%. Both rates were previously reduced by 10 basis points in May. The announcement came in the wake of recent data showing that retail sales and industrial output growth slowed to a 14-month low. Additionally, October's figures indicated that the GDP for the third quarter grew at the most sluggish rate since Q3 2024. At the same time, new yuan loans fell short of market expectations, underscoring ongoing challenges in credit demand.