China keeps Loan Prime rate steady at record Lows.

The People’s Bank of China kept its benchmark loan prime rate unchanged at record lows on Wednesday, with monetary conditions set to remain loose for longer as China struggles with slowing economic growth.  The PBOC left its one-year LPR at 3.45%, while the five-year LPR, which is used to determine mortgage rates, was left unchanged at 4.20% in the PBOC's final rate decision for 2023. Both rates were at historic lows after three cuts over the past year.  The move was largely telegraphed by the PBOC, given that it had left medium-term lending rates unchanged last week. But the central bank also injected a bumper 1.45 trillion yuan ($204 billion) worth of liquidity into the banking system last week.  The LPR is determined by the PBOC based on considerations from 18 designated commercial banks and is used as a benchmark for lending rates in the country.


State media reports had forecast more cuts to the LPR by the end of 2023. But given that the rate is already at record lows, the PBOC had little room to act. While the PBOC has kept the lending benchmark at record lows for more than a year, calls have grown for more monetary loosening in the country, especially as a post-COVID economic recovery failed to materialize. The bank had last trimmed the one-year LPR in August by a smaller-than-expected margin. A swathe of economic readings for November showed continued weakness. Chinese manufacturing activity remained in contraction, while the country slid further into disinflation as consumer spending remained weak.


Still, recent resilience in the yuan has offered the PBOC some headroom to potentially lower rates further. But the bank has also signaled reluctance over such a move, given that it could potentially destabilize the banking sector. The PBOC’s liquidity measures have been aimed at shoring up capital investment and consumer spending in the country, the latter of which has dried up substantially this year. The bank also attempted to provide more support to the beleaguered property market, which was hit with a string of high-profile defaults over the past two years. The sector accounts for a quarter of China’s economy and has been on a sustained downturn since the COVID-19 pandemic. Beyond the PBOC’s liquidity injections, investors have been clamoring for more targeted, fiscal measures from Beijing to support an economic recovery. But the government has remained largely conservative in rolling out more policy support, amid concerns over high debt levels.

14 December, 2023

Read more:

World Bank: approved $350 million financing for RISE-II operation in Pakistan

07 December, 2023

'A lackluster January through May': One chart shows what stock investors can expect in a crucial election year

30 December, 2023

With Bitcoin Spot ETF Approvals, Halving and Incoming Upgrades, What Should You Expect from BTC in 2024?

05 December, 2023

Polygon Labs Announced Upcoming Updates for Products and Events Expected in December

28 November, 2023

Cross-Chain Protocol Wormhole Secures $225M in Funding, Now Valued at $2.5B

22 November, 2023

United Kingdom Seeks to Strengthen Its Digital Asset Sector

14 November, 2023

The Dow Jones has seen a dreaded 'death cross.' Here's what it means.

06 November, 2023

USDT Accounts for 80% of All Crypto Transactions in Brazil in 2023

30 October, 2023

US SEC Approves Grayscale’s Ethereum ETF Filing

22 October, 2023

Binance Secures New Euro Banking Partners to Resume Fiat Transactions

16 October, 2023

Bitcoin Is Good Hedge in Current Geopolitical Tensions, Says Paul Tudor Jones

10 October, 2023

Circle Intervenes in SEC Case against Binance, Defends Stablecoins’ Regulatory Status

29 September, 2023

Web3 Startup IYK Raised $16.8M in Recent Funding Round Led by A16z

27 September, 2023

Bybit to Suspend UK Operations in Response to FCA’s New Rules

24 September, 2023

Celsius Former Chief Revenue Officer Pleads Guilty to Criminal Charges, Awaits Sentencing

15 September, 2023

US Judge Dismisses Class Action Suit against Uniswap

31 August, 2023

Binance Phasing Out Support for BUSD Stablecoin by Q1 2024

31 August, 2023

Arrange a call