China Keeps Lending Rates Unchanged
(RTTNews) - China left its benchmark lending rates unchanged on Monday after the central bank maintained its medium-term lending facility rate last week.
The People's Bank of China maintained its one-year loan prime rate, or LPR, at 3.45 percent. Likewise, the five-year LPR, the benchmark for mortgage rates, was left unchanged at 4.20 percent.
The one-year LPR was last reduced by 10 basis points in August and the five-year LPR was cut by similar 10 basis points in June.
The Chinese central bank fixes the LPR monthly based on the submission of 18 designated banks. However, Beijing has influence over the fixing. The LPR replaced the traditional benchmark lending rate in August 2019.
The central bank remained reluctant to cut the LPR as such an action would add downward pressure to the currency.
The PBoC was widely expected to keep the benchmark lending rates today as the medium-term lending facility, which acts as a guide to loan prime rates, was left unchanged at 2.50 percent last week.
The bank had added CNY 995 billion via the MLF on January 15. The interest rate was unchanged from the previous operation, at 2.5 percent, which was in contrast to the market expectations of rate cut.
The Chinese economy met the full year growth target in 2023 but the fourth quarter expansion missed expectations amid property crisis and weak global demand.
In 2023, GDP grew 5.2 percent after rising 3.0 percent in the previous year. In the fourth quarter, the economy logged 5.2 percent annual growth.
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