China Keeps Key Loan Rates Unchanged

China’s benchmark one-year lending rate, the country’s benchmark market-based lending rate, stood at 3.1% on Thursday, unchanged from the previous month, the National Interbank Finance Center said.

It added that the benchmark rate for loans over five years, on which many lenders base mortgage rates, also remained unchanged from the previous reading of 3.6%.

According to the Xinhua News Agency, the lower rates reflect the level of financing costs for households and businesses. Lower interest rates mean less burden on borrowers and stronger support for economic activity.

In 2024, the People’s Bank of China (the central bank) guided the key lending rate downward, implementing two cuts in both reserve requirement ratios and policy rates to help maintain the economic recovery.

According to this year’s government work report, China has decided to adopt a moderately accommodative monetary policy. The Governor of the People’s Bank of China, Pan Gongsheng, recently confirmed that the central bank will reduce reserve requirement ratios and interest rates as appropriate this year, in line with domestic and international economic and financial conditions, as well as the performance of financial markets.