China's Central Bank Keeps Benchmark Lending Rates Unchanged

Forex - The People's Bank of China (PBOC) has maintained its key lending rate, the Loan Prime Rate (LPR), unchanged. The central bank announced that the one-year lending rate will remain at 3.1% and the five-year LPR at 3.6%. Market observers participating in a Reuters survey had expected the PBOC not to change the lending rates this month. Bruce Pang, JLL's Chief Economist and Head of Research for Greater China, stated that "there is no urgent need to adjust the LPR this month," adding that Chinese leaders are likely continuing to assess the impact of recent measures aimed at stimulating the economy. Pang noted that the record-low net interest margins in Chinese commercial banks limit their ability to support low lending rates, commenting that "while further policy rate cuts before the end of the year seem unlikely, the potential for rate cuts in 2025 remains." The one-year LPR primarily affects corporate and household loans in China, while the five-year LPR serves as a benchmark for mortgage rates.