In August, China had lowered its one-year LPR by 10 basis points, surprising markets by keeping the five-year rate unchanged. Both rates serve as benchmarks for new and outstanding loans, including mortgages. Most market analysts and traders had predicted the rates to remain steady, following the central bank’s recent actions. Last week, the bank decided to roll over maturing medium-term policy loans and maintained their interest rate, setting the stage for the current LPR fixings, according to several media reports.

The decision to keep the LPRs unchanged is in line with broader monetary policy, which has seen the central bank reduce the amount of cash that banks must hold as reserves, thereby boosting liquidity.

The Chinese yuan has been under pressure, losing more than 5 per cent against the dollar this year. Economic data such as retail sales and industrial production have shown encouraging signs, exceeding expectations.

Overall, China’s cautious yet optimistic approach suggests a more stable economic trajectory, although the magnitude and pace of future policy easing remain uncertain. Experts predict that the low base effect will ensure China’s growth exceeds 5 per cent in the upcoming fourth quarter, keeping the door open for possible LPR reductions next month.

Fibre2Fashion News Desk (NB)