China Maintains Key Interest Rates As Expected
(RTTNews) - The People's Bank of China maintained its benchmark lending rates for the sixth straight month.
The PBoC kept its one-year loan prime rate unchanged at 3.0 percent on Thursday. Similarly, the five-year LPR, the benchmark for mortgage rates, was retained at 3.50 percent. The decision came in line with expectations.
The bank had reduced its both LPRs by quarter points in October 2024 and 10 basis points each in May.
The PBoC fixes the LPR monthly based on the submission of 20 designated banks. However, Beijing has influence over the fixing. The LPR replaced the traditional benchmark lending rate in August 2019.
In the third quarter, the Chinese economy logged a slower growth of 4.8 percent. However, through the first three quarters of the year, the economy grew 5.2 percent driven by strong industrial production. The figure was stronger than Beijing's full year growth target of around 5 percent.
Official data released last week showed that industrial production and retail sales grew at slower rates in October and investment downturn deepened further as economic activity weakened towards the end of the year. Industrial production increased 4.9 percent and retail sales rose only 2.9 percent in October.
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