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China Holds Rates Steady: Resists Pressure After Fed’s Rate Cut

China Holds Rates Steady

China’s central bank, the People’s Bank of China, kept its benchmark lending rates unchanged on Friday, resisting growing market expectations for a cut. The one-year loan prime rate remained at 3.35%, while the five-year rate stayed at 3.85%, signaling a cautious approach amid global monetary shifts.

This decision follows the U.S. Federal Reserve’s bold interest rate cut earlier in the week, which saw a reduction of 50 basis points, larger than expected. Many analysts had predicted that China might follow suit with a rate cut of its own, leveraging the Fed’s move as an opportunity to ease domestic monetary policy.

Despite the Fed’s actions, China’s central bank chose to maintain the status quo. Analysts believe this decision reflects the People’s Bank of China’s desire to manage inflation and economic stability while balancing domestic conditions.

The move has sparked discussions about China’s economic strategy, particularly as the country faces slower growth. Market participants are now closely watching whether China will adjust its monetary policy in the near future to stimulate its economy.

For now, China’s decision signals a divergence from the global trend of easing monetary policies, as its central bank continues to chart its own course in response to domestic challenges.

 

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