The offshore yuan held near 6.69 per dollar on Monday, hovering at its strongest level since July 2022, after the People’s Bank of China left its benchmark lending rates unchanged for a 16th consecutive month at record lows. The one-year loan prime rate (LPR) was maintained at 3.0%, while the five-year LPR stayed at 3.5%.
The decision underscores policymakers’ limited room for further monetary easing as the yuan continues to appreciate and other major central banks move toward higher interest rates. Even so, the overall macro environment still supports the prospect of a rate cut before year-end, with economic growth slowing, inflation subdued, and credit demand remaining weak.
At the same time, investors’ attention remained fixed on high-level US–China engagement, after officials from both countries met in New York on Sunday to lay the groundwork for a closely watched summit between Presidents Donald Trump and Xi Jinping scheduled for September 24.
