Financial News: China Leaves Benchmark Interest Rate Unchanged

China Leaves Benchmark Interest Rate Unchanged

08/20/2025 - 01:52:00 (RTTNews)

(RTTNews) - The People's Bank of China maintained its interest rates on Wednesday, as Beijing focus more on fiscal policy easing and targeted measures.

The central bank left its one-year loan prime rate at 3.0 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was retained at 3.50 percent.

The bank had reduced its both LPRs by quarter points in October 2024 and 10 basis points each in May.

The PBoC fixes the LPR monthly based on the submission of 18 designated banks. However, Beijing has influence over the fixing. The LPR replaced the traditional benchmark lending rate in August 2019.

Rather than direct interest rate cuts, policymakers recently moved to support credit activity in more targeted ways, with subsidies for consumer loans set to come into effect in September, economists at ING said in a note.

Beijing aims to achieve around 5 percent economic growth this year but the International Monetary Fund forecast 4.8 percent expansion. The economy continues to face headwinds from trade tariff, sluggish property market and subdued domestic demand.

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