China's Central Bank Keeps Benchmark Lending Rates Steady

Forex - The People's Bank of China (PBOC) has kept its benchmark lending rates unchanged. The one-year loan prime rate (LPR) remains at 3.1%, while the five-year rate is held steady at 3.6%. Economists had also expected the PBOC to maintain its lending rates. The one-year LPR affects corporate and most household loans, while the five-year LPR serves as a reference for mortgage rates. Following a widely anticipated 25 basis point cut in October, the PBOC did not alter the one-year and five-year LPRs in November. Chinese leaders have pledged to shift their monetary policy to a "moderately loose" stance next year, moving away from the current "prudent" approach in order to address the increasing challenges faced by the world's second-largest economy. Economists predict more benchmark interest rate cuts in 2025. Major investment banks and research firms anticipate that the Chinese yuan will weaken further next year amid expectations that President-elect Donald Trump will follow through on threats of tariff increases.