22.12.202501:06:18UTC+00China Keeps LPR Rates Steady for 7th Month

The People's Bank of China (PBoC) has sustained its key lending rates at historically low levels for the seventh month in a row this December, aligning with market forecasts. This decision followed the PBoC's choice to keep its seven-day reverse repo rate steady at 1.4% this month. This rate, now serving as the central policy rate, underscores the bank's reduced urgency for further monetary stimulus, given that the economy is progressing towards meeting its growth objectives for the year. The one-year Loan Prime Rate (LPR), which serves as the benchmark for most corporate and household loans, remained fixed at 3.0%. Concurrently, the five-year LPR, which is crucial for setting mortgage rates, also stayed at 3.5%. Both of these rates saw a reduction by 10 basis points in May. This decision follows recent data indicating that both retail sales and industrial output growth slowed in November amidst ongoing issues in the property sector. Furthermore, the volume of new yuan loans fell short of October's figures and market predictions, underscoring a persistent weakness in credit demand.