China Maintains Benchmark Lending Rates Amid Economic Recovery Signs. China’s central bank announced on Monday that it would maintain its benchmark lending rates, a move expected by the market following recent policy rate stability amidst signs of economic recovery. According to the People’s Bank of China, the one-year loan prime rate remains at 3.45%, while the five-year rate stands at 3.95%.
This decision aligns with the recent unchanged status of the medium-term lending facility rate, which serves as a reference for the loan prime rate set by major Chinese banks.
China’s economy exceeded expectations in the first quarter, with a 5.3% year-on-year GDP growth. Despite setting a growth target of around 5.0% for the year, the robust economic performance reduces the likelihood of immediate easing measures, despite some economists advocating for interest rate cuts to support the struggling real estate sector.
Additionally, the depreciation pressure on the yuan, similar to other Asian currencies, amid a strengthening U.S. dollar is a significant factor. The central bank reiterated its commitment to maintaining a stable currency, emphasizing its aim to keep the yuan at a reasonable and balanced level.
In light of China’s robust economic momentum and the central bank’s commitment to currency stability, analysts anticipate a cautious approach to monetary policy adjustments. While some economists advocate for further interest rate cuts to stimulate the real estate sector, policymakers may prioritize maintaining stability amidst external currency pressures and achieving targeted economic growth.
The decision to hold benchmark lending rates steady reflects a delicate balancing act between supporting economic recovery and ensuring financial stability in the face of evolving domestic and international challenges. China Maintains Benchmark Lending Rates Amid Economic Recovery Signs.
