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China Holds Loan Prime Rates for Eighth Month as PBOC Leans on Targeted Tools

Authorities signal patience on broad easing, prioritizing sector-specific measures for now.

Paramilitary police officers stand guard in front of the headquarters of the People's Bank of China, the central bank (PBOC), in Beijing, China September 30, 2022. REUTERS/Tingshu Wang
A man walks past the headquarters of the People's Bank of China, in Beijing, China May 7, 2025. REUTERS/Tingshu Wang
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Overview

  • The one-year LPR stayed at 3.00% and the five-year at 3.50%, marking an eighth consecutive month without change.
  • The central bank set the USD/CNY daily midpoint at 7.0051, the strongest fixing since May 2023, and injected 158.3 billion yuan via seven-day reverse repos at 1.4%.
  • A Reuters poll showed all 22 surveyed participants expected no change to the LPRs this month.
  • Deputy Governor Zou Lan indicated room to cut reserve requirements and policy rates in 2026, with several banks projecting potential moves in the first half if conditions warrant.
  • Ultra-low deposit rates are steering household funds toward equities, insurance and gold, with market estimates pointing to roughly US$7 trillion in reallocation and regulators tightening oversight of leverage and trading.