China Keeps Interest Rates Unchanged for the Sixth Consecutive Month

The People’s Bank of China (PBOC) announced on Monday that it would maintain its benchmark market-linked interest rates unchanged for the sixth straight month, in line with broad analyst expectations.

According to the National Interbank Funding Center, the one-year Loan Prime Rate (LPR) will remain at 3.1%, while the five-year LPR – a key reference rate for mortgage lending – is held steady at 3.6%.

The PBOC last cut its key interest rates by 25 basis points in October. Since August 2019, the central bank has been using the LPR mechanism as a market-based benchmark, replacing the traditional lending rate. These rates are determined monthly based on quotations submitted by 18 designated commercial banks.

This move to keep rates steady comes as China’s economy posted a stronger-than-expected growth of 5.4% year-on-year in the first quarter of 2025 (January to March), driven largely by a surge in exports ahead of new U.S. tariffs.

However, despite the current growth momentum, analysts warn that the world’s second-largest economy may face a significant slowdown in the coming months due to ongoing trade tensions. The United States has implemented tariffs of up to 145% on Chinese imports, prompting Beijing to respond with retaliatory tariffs of 125% on American exports. Nevertheless, China has reiterated its commitment to keeping its markets open to global trade and investment.