China Holds Key Interest Rates Steady

The People's Bank of China (PBOC), the country's central bank, decided on Wednesday to keep its market-based benchmark interest rates unchanged for the second consecutive month. This decision aligns with the nation's broader monetary policy aimed at supporting economic activity and easing the financial burden on individuals and businesses.

Decision Details and Economic Implications

According to the National Interbank Funding Center, the one-year loan prime rate (LPR) was maintained at 3%, while the five-year LPR, which serves as a key reference for mortgage rates, was held at 3.5%. This stability in interest rates signals a continuation of China's accommodative monetary policy.

Xinhua news agency noted that maintaining low interest rates aims to reduce borrowing costs for households and companies, which in turn stimulates investment and consumption. Recent data reflects the effectiveness of this approach: the weighted average interest rate on new corporate loans in China fell to about 3.2% last July, a decrease of 45 basis points from the previous year. Similarly, the interest rate on new personal housing loans dropped to around 3.1%, a decrease of 30 basis points.

China's Future Commitments

In its 2025 government work report, China pledged to pursue a moderately accommodative monetary policy. This commitment underscores Beijing's dedication to supporting the economy against internal and external challenges by maintaining favorable financing conditions.