American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Latest News

China holds key lending rates steady, prioritizing financial stability over rate cuts

by admin February 20, 2025
February 20, 2025
China holds key lending rates steady, prioritizing financial stability over rate cuts

China opted to keep its key lending rates unchanged on Thursday, signaling a focus on financial stability rather than aggressive interest rate cuts to support economic growth.

The People’s Bank of China (PBOC) maintained the one-year loan prime rate (LPR) at 3.1% and the five-year LPR at 3.6%.

These benchmark rates, which influence corporate and household borrowing costs, are set monthly based on proposals from select commercial banks.

While the one-year LPR primarily impacts business and consumer loans, the five-year rate is a key reference for mortgage lending.

The decision was widely anticipated, aligning with forecasts from a Reuters poll. It comes as Beijing balances the need for economic stimulus with efforts to prevent excessive financial risks.

Yuan stability and economic policy priorities

Speaking at a financial conference in Saudi Arabia on Sunday, PBOC Governor Pan Gongsheng emphasized that maintaining a stable yuan is crucial for both domestic and global financial stability.

He noted that a stronger US dollar puts pressure on many currencies, but the yuan has remained relatively steady.

However, the Chinese currency has depreciated by 2.5% against the dollar since Donald Trump’s election victory in November.

Pan highlighted that China is shifting toward consumption-driven growth while reinforcing its commitment to a proactive fiscal policy and accommodative monetary measures in 2025.

However, the central bank faces a complex challenge—defending the yuan’s value while trying to stimulate a slowing economy.

China balancing currency defense and economic growth

The PBOC’s strategy of supporting the yuan presents a delicate balancing act.

A weaker yuan could boost China’s export competitiveness, making its goods more affordable in global markets.

However, a stronger currency increases import costs, potentially dampening already fragile consumer demand.

Further complicating China’s economic outlook is the trade policy stance of the newly inaugurated US President Donald Trump.

Since taking office last month, Trump has imposed an additional 10% tariff on all Chinese imports, on top of existing levies of up to 25%.

The tariff escalation adds external pressure to China’s economy, making Beijing’s policy decisions even more critical in the months ahead.

The post China holds key lending rates steady, prioritizing financial stability over rate cuts appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Trump considers $5,000 DOGE dividend checks for American taxpayers—here’s why
next post
Palantir stock slides over 12% on reports of defence budget cuts

Related Posts

She managed to flee Gaza after half her...

June 28, 2024

European markets slip as central bank meetings dominate;...

December 17, 2024

Hong Kong reclaims ‘world’s freest economy’ status from...

October 17, 2024

Rate cuts back on the table? Fed seen...

February 26, 2025

Hamas announces Yahya Sinwar as head of political...

August 7, 2024

Rich List 2025: UK billionaires decline for first...

May 18, 2025

Oil majors face challenges after US cancels Venezuelan...

March 31, 2025

Prolonged weakness in gold prices seems unlikely, say...

November 17, 2024

Zelensky warns ‘millions will be killed’ without US...

February 26, 2024

Indian markets tumble as Sensex, Nifty drop over...

December 13, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Europe bulletin: Manchester synagogue attack aftermath, stocks close higher

      October 5, 2025
    • Evening digest: Trump sets deadline for Hamas, Canada’s slowdown, BTC rebounds

      October 5, 2025
    • Iran executes six people for alleged links to Israel, state media reports

      October 5, 2025
    • US digest: Trump’s Hamas ultimatum, government shutdown stalemate continues

      October 5, 2025
    • Japanese stocks may extend record run as Takaichi win revives ‘Abenomics’

      October 5, 2025

    Categories

    • Business (4,191)
    • Investing (2,958)
    • Latest News (2,080)
    • Politics (1,536)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved