China keeps benchmark lending rates unchanged for 16th month in September
SHANGHAI: China kept its benchmark lending rates unchanged for the 16th straight month on Sunday, in line with market expectations. Why it’s important The steady loan prime rates underscored the limited scope for fresh monetary easing after some major global central banks recently adopted a more hawkish stance, even as the yuan continued to strengthen. By the numbers The one-year LPR was kept at…
In September, China maintained its benchmark lending rates at unchanged levels for the 16th consecutive month, as expected by the market, according to the source. This decision highlights the restricted potential for further monetary easing following recent hawkish stances from major global central banks, even though the Chinese yuan has continued to appreciate. The key figures are a one-year LPR of 3.00% and a five-year LPR that remained steady at 3.50%.
In a Reuters survey, all 21 market participants predicted that neither rate would be adjusted. The Federal Reserve's recent interest rate hike and its projection of additional hikes in the months ahead have been a significant factor. The new U.S. central bank chief, Kevin Warsh, along with a unanimous decision, effectively recognized the Trump administration's failure to control inflation, which policymakers are concerned could worsen.
Furthermore, the yield gap between benchmark U.S. 10-year Treasury bonds and Chinese government bonds has reached near-record highs since the Fed's rate increase. China's credit growth has been decelerating as contraction in the property and local government sectors is outpacing the growth of emerging industries, according to the central bank governor, Pan Gongsheng.
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