FX.co ★ China Holds LPR Rates at Record Lows for 13th Month

The People’s Bank of China left its key lending rates at record lows for a 13th consecutive month in June 2026, as widely anticipated. The decision underscored policymakers’ caution about the economic fallout from the conflict in the Middle East, even as China’s recent growth momentum has faltered amid mixed data. The one-year loan prime rate (LPR)—the benchmark for most corporate and household borrowing—remained at 3.0%, while the five-year LPR, a key reference for mortgage lending, was kept at 3.5%.

Inflationary pressures on both consumers and producers persisted, driven by higher energy costs and ongoing supply chain disruptions linked to the Middle East conflict. In May, retail sales unexpectedly declined for the first time since December 2022, even as industrial output growth picked up. Yuan-denominated lending also rebounded in May after contracting in April, though the pace of expansion was slower than in May of the previous year. At the same time, housing prices continued to fall, highlighting enduring weakness in the property sector.