- China’s key one-year lending rate remained unchanged at 3.45% after being cut for the second time in three months in August.
- The key interest rate for five-year loans remained stable at 4.2% in September, in line with economists’ expectations.
Photo taken on August 17, 2023 shows US dollars and Chinese yuan in Fuyang city, east China’s Anhui province.
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China’s banks left their key lending rates unchanged in September after the downturn in the world’s second-largest economy showed signs of stabilizing following recent policy support.
The People’s Bank of China left its key one-year lending rate – the peg for most household and corporate loans in China – unchanged at 3.45%. The five-year benchmark lending rate – the rate set for most mortgages – was maintained at 4.2%, according to a statement from the People’s Bank of China on Wednesday.
Wednesday’s announcement is in line with economists’ expectations for September after the PBOC kept its medium-term interest rate stable last Friday, following its announcement last Thursday of a second cut in reserve requirements for all banks this year.
China’s retail sales and industrial production data released on Friday beat expectations in August.
They were confirmed by other data points released over the last three weeks – from inflation rates and trading volumes to the Purchasing Managers’ Index, usually considered leading indicators – that also pointed to beginning signs of improvement in the economy.
In August, China cut its benchmark one-year lending rate by 10 basis points for the second time in three months, while the benchmark five-year lending rate unexpectedly remained unchanged.
China’s key lending rate is calculated each month based on the proposed interest rates received by the People’s Bank of China from 18 designated commercial banks.