China's central bank maintained its benchmark rates on Thursday, as widely expected, as the economy logged a strong growth after the unwinding of zero-Covid policy.
The People's Bank of China left its one-year loan prime rate, or LPR, unchanged at 3.65 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was retained at 4.30 percent.
Earlier, the bank had reduced the five-year LPR rate by 15 basis points each in May and August 2022, and by 5 basis points in January 2022. The one-year LPR was last lowered in August 2022.
The LPR is fixed monthly based on the submission of 18 banks, though Beijing has influence over the rate-setting. The LPR replaced the central bank's traditional benchmark lending rate in August 2019.
Markets widely anticipated the PBoC to hold the LPR today as the medium-term lending facility, or MLF, which acts as a guide to the LPR, was kept unchanged early this week.
On Monday, the PBoC had added CNY 170 billion via one-year MLF at an interest rate of 2.75 percent. The bank also conducted seven-day reverse repo operations worth CNY 20 billion at a rate of 2.00 percent.
In the first quarter, the second-largest economy logged an annual growth of 4.5 percent, stronger than the 2.9 percent expansion registered in the fourth quarter of 2022, official data showed early this week.
After a weaker 3.0 percent economic growth in 2022, the Chinese government set a moderate growth target of around 5.0 percent for this year.
The International Monetary Fund had projected growth outlook for China at 5.2 percent this year and 4.5 percent in 2024.
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December 26, 2025 08:42 ET Third quarter economic growth data from some major economies including the U.S. were the main news in this holiday shortened week. GDP growth and industrial production data from the U.S. helped to boost morale, while the consumer confidence survey results were less upbeat. In Europe, the quarterly economic growth data from the U.K. drew attention, while the minutes of the Australian central bank’s latest policy session was in focus in Asia.