FX.co ★ Offshore Yuan Steady After PBOC Decision

The offshore yuan stabilized at approximately 7.11 against the dollar on Thursday, as China indicated a decreased urgency for further monetary policy easing amidst ongoing domestic and international challenges. The one-year Loan Prime Rate, which serves as the benchmark for most corporate and household lending, was held steady at 3%. Similarly, the five-year LPR, crucial for mortgage calculations, remained unchanged at 3.5%, following a 10 basis point reduction in May 2025. This decision followed the central bank's earlier choice this month to maintain the seven-day reverse repo rate, bolstering expectations of a more conservative policy approach. Recent economic indicators revealed a significant contraction in fixed-asset investment, continued slowdowns in industrial production and retail sales, and an unexpected drop in exports, intensifying concerns about China's economic growth prospects. Investors are now eagerly anticipating next week's PMI data releases for further insights into the nation's economic condition.