The People’s Bank of China kept its key lending rates at record lows for a 16th consecutive month in September 2026, in line with market expectations, even as the yuan continued to appreciate. The decision underscored policymakers’ caution about the economic fallout from the conflict in the Middle East, despite exports remaining well supported by strong AI-related demand. The one-year loan prime rate (LPR)—the benchmark for most corporate and household borrowing—was left unchanged at 3.0%, while the five-year LPR, a key reference for mortgage lending, stayed at 3.5%. Elsewhere in the economy, industrial production rose by more than expected, but retail sales growth slowed and came in below estimates. New yuan loans returned to growth in August, though the increase fell short of forecasts, as subdued borrowing by households and firms continued to drag on overall credit expansion. At the same time, housing prices fell again in August, although the decline was the smallest in eight months, helped by government support measures.