China keeps key lending rate unchanged in January as focus on Trump, stimulus By Investing.com
Investing.com– The People’s Bank of China left its benchmark key interest rate unchanged on Monday, with Beijing likely staying dry as it awaits more clarity on U.S. President-elect Donald Trump’s plans for trade tariffs.
The PBOC left its one-year rate at 3.1%, while the , which is used to set mortgage rates, was left at 3.60%. Markets had widely expected a hold, with both rates remaining at record lows after cuts until 2024.
The LPR is determined by the PBOC based on consideration of 18 designated commercial banks and is used as a benchmark for the country’s lending rates.
The central bank is seen to have limited room for lower rates, given the recent weakness in the . The Chinese currency was trading near its weakest levels since September 2023.
Still, interest rates are expected to fall further this year as China ramps up its stimulus measures, especially in light of increased US trade tariffs.
A particular focus will be on Beijing’s plans to increase fiscal stimulus this year, with the government widely expected to deliver targeted measures to support personal consumption and the property market.
Trump has promised to impose trade tariffs of up to 60 percent on China when he takes office later Monday, which could be bad for the country’s trade-reliant economy.
However, recent data shows that China’s economic growth picked up in the fourth quarter of 2024, amid support from recent stimulus measures.
