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2w ago

PBOC Holds Loan Prime Rates for Fourth Straight Month Despite Fed Cut

Beijing signals a preference for policy stability despite the Federal Reserve's recent cut.

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/File Photo
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Overview

  • The People's Bank of China kept the one-year LPR at 3.00% and the five-year LPR at 3.50% in the September 22 fixing.
  • This marks a fourth consecutive month without changes and follows last week's decision to leave the seven-day reverse repo rate unchanged.
  • China's stance contrasts with the U.S. Federal Reserve, which lowered its benchmark rate in mid-September.
  • Officials are balancing soft domestic indicators with resilient exports and a strong equity market, reducing urgency for large-scale easing.
  • A Reuters survey had unanimously forecast no move, and several analysts expect only modest steps such as small LPR or RRR cuts later this year if needed to support growth.