China keeps key lending rates unchanged at record lows

ISTANBUL

The People’s Bank of China (PBoC) left its benchmark lending rates unchanged at historic lows on Monday, in line with market forecasts.

The one-year loan prime rate (LPR), a key reference for corporate and household borrowing, stood at 3%. The five-year LPR, which serves as a benchmark for mortgages, was held at 3.5%.

The central bank last adjusted rates in May, cutting them by 10 basis points – its first reduction of the year – after holding at record lows since a 25 basis point cut in October 2024.

The decision followed China's 4.8% economic growth in the third quarter, slowing from the previous quarter. The country's important economic indicators, such as retail sales, industrial production, and investments, have also been slowing in the recent months.

The LPR, determined based on the profit margin announcements of 18 banks in China on the borrowing rate set by the central bank, has served as the country's benchmark interest rate since 2019.

The one-year loan prime rate is used as a reference for corporate loans, while the five-year rate is used for real estate loans.

Following Monday’s announcement, the Chinese yuan remained broadly stable, trading around 7.04 to the US dollar.