By Mucahithan Avcioglu
ISTANBUL (AA) - The People’s Bank of China (PBoC) left its benchmark lending rates unchanged at historic lows on Monday, in line with market forecasts, as the country’s economy posted solid growth despite weaker retail sales.
The one-year loan prime rate (LPR), a key reference for corporate and household borrowing, stayed at 3%. The five-year LPR, which serves as a benchmark for mortgages, was held at 3.5%.
The central bank last adjusted rates in April, cutting them by 10 basis points -- its first reduction of the year -- after holding at record lows since a 25 basis point cut in October 2024.
The decision follows China’s better-than-expected 5.2% economic growth in the second quarter, slightly ahead of market expectations of 5.1%. However, June retail sales rose just 4.8% year-on-year, below the expected 5.2%.
The move also comes ahead of the US Federal Reserve’s interest rate decision, with the Fed widely expected to hold rates steady on Wednesday.
Following Monday’s announcement, the Chinese yuan remained stable, trading around 7.18 to the US dollar.