FX.co ★ China Holds LPR Rates Steady for 8th Month

In January, the People's Bank of China (PBoC) maintained its principal lending rates at historic lows for the eighth month in succession, aligning with market predictions. This decision followed the central bank's recent action to lower interest rates for specific sectors to stimulate the economy and hinted at possible upcoming reductions in both banks' cash reserve requirements and more general rate cuts. The one-year Loan Prime Rate (LPR), which serves as the benchmark for most business and personal loans, stayed at 3.0%. Similarly, the five-year LPR, crucial for determining mortgage rates, remained constant at 3.5%. These rates were last reduced by 10 basis points in May. This decision coincided with Monday's data release indicating that GDP growth for 2025 reached the official target of 5%, despite ongoing challenges in the property sector. Additionally, new yuan loans in December saw a significant increase over November's figures, surpassing market forecasts due to government stimulus efforts designed to encourage increased credit uptake.