China's central bank held its medium-term lending facility rate steady at 2.0% on Monday in an effort to stabilize the yuan which has weakened since Donald Trump's victory in the U.S. presidential election. Economists expect the rate to remain stable until the new U.S. administration takes office in January.
The yuan has come under pressure following Donald Trump's victory in the U.S. presidential election, with the offshore yuan weakening a little over 2% since the U.S. presidential election on Nov. 5.
China on Monday kept its medium-term lending rate steady, as the country's central bank seeks to stabilize the yuan which has come under pressure following Donald Trump's victory in the U.S. presidential election.The People's Bank of China kept the medium-term lending facility rate unchanged at 2.0% on 900 billion yuan worth of one-year loans to some financial institutions,
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, expects the PBOC to hold off more rate cuts until the new U.S. administration takes office in January, which is expected to bring higher tariffs on Chinese exports. The central bank would"walk one step at a time to assess the policy results," said Gary Ng, senior economist at Natixis, although China may want a weaker yuan to support exports, it will prefer"a gradual depreciation rather than a sudden shock."unchanged at 3.1% and 3.6%, respectively. The 1-year LPR affects corporate and most household loans in China, while the 5-year LPR acts as a benchmark for mortgage rates.
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