The Chinese central bank is keeping interest rates unchanged

China’s central bank kept interest rates steady at their monthly rate Monday as Beijing again refrained from aggressively stimulating its faltering economy while many other countries tightened monetary policy to fight inflation.

The People’s Bank of China left the benchmark one-year lending rate unchanged at 3.70%, while the five-year LPR, the benchmark mortgage rate, was kept at 4.45%.

The move was widely anticipated by analysts and traders after the central bank left the interest rate on its one-year medium-term lending facility unchanged at 2.85% last week while pumping 200 billion yuan ($29.78 billion) of liquidity into the banking system via the medium-term credit facility.

The PBOC sets its benchmark lending rates each month based on offers from the country’s top lenders. The banks, in turn, price new loans using the key interest rate as a reference. Since the introduction of the new benchmark in 2019, Chinese banks have gradually replaced existing loans with new ones based on the new lending rates.

The People’s Bank of China cut interest rates for first-time homebuyers last month while cutting its benchmark mortgage rate by an unexpectedly wide range of 0.15 percentage points. The Chinese central bank is keeping interest rates unchanged

Brian Lowry

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