China maintained its key lending rates unchanged on Friday, balancing the need to stimulate economic growth with support for the weakening yuan. The decision follows a 25-basis-point rate cut by the U.S. Federal Reserve earlier in the week, which analysts anticipate will have a limited impact on China's monetary policy. The PBOC faces the challenge of addressing entrenched deflation, sluggish consumer demand, and a prolonged property market downturn.
The move, which follows a 25-basis-points rate cut by the U.S. Federal Reserve earlier in the week, was expected, according to a Reuters poll of economists.
BEIJING, CHINA - DECEMBER 02: The People's Bank of China building isn seen on December 2, 2024 in Beijing, China.China kept its main benchmark lending rates unchanged on Friday, as Beijing faces the challenge of bolstering economic growth while backstopping a weakening yuan.the one-year loan prime rate at 3.1%, with the five-year LPR at 3.6%. The 1-year LPR affects corporate and most household loans, while the 5-year LPR serves as a reference for mortgage rates.
The Fed's easing cycle going forward will create "some room for the PBOC to follow up," Yan Wang, chief emerging markets and China strategist at Alpine Macro told CNBC's "" on Thursday, while stressing that fiscal easing will play a more critical role in driving the Chinese economy next year.
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