China leaves lending rates unchanged in line with expectations

1- and 5-year loan prime rates constant at 3.45%, 4.2%, respectively

By Tuba Ongun

The People’s Bank of China (PBoC) on Wednesday decided to leave its benchmark lending rates unchanged, meeting market forecasts.

The one-year loan prime rate (LPR) – the medium-term lending facility uses for corporate and household loans – was left at a record low of 3.45% after a 10 basis point cut in August.

The five-year LPR, the peg for mortgages, meanwhile, remained at 4.2% for the third consecutive month.

Last week, the bank kept its medium term facility loan rate steady at 2.50%.

Despite China's economy showing signs of improvement last month, the overall economic outlook remains uncertain due to weak overseas demand and a property downturn.

China's gross domestic product (GDP) grew 0.8% on a quarterly basis in the second quarter of 2023, easing from a 2.2% growth in the previous period.

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