China’s central bank has left its key benchmark lending rates unchanged for a seventh consecutive month, despite signs of slowing growth and continued weakness in the country’s property sector.
The People’s Bank of China kept the one-year loan prime rate (LPR) at 3% and the five-year LPR at 3.5%, in line with market expectations. The one-year rate serves as a benchmark for new loans, while the five-year rate influences mortgage pricing.
The decision comes against a backdrop of softer-than-expected economic data in November. Retail sales rose just 1.3% year-on-year, sharply below forecasts and slowing from the previous month, while industrial output grew 4.8%, its weakest pace since August 2024.
China’s prolonged property downturn continues to weigh on the outlook. Fixed-asset investment, including real estate, contracted 2.6% in the first eleven months of the year, exceeding economists’ expectations for a smaller decline. New home prices also fell further in November across major cities, underscoring persistent stress in the housing market.
Economists say the extended pause suggests caution from policymakers about relying solely on monetary easing. Analysts argue that while rate cuts could provide some support, deeper structural reforms and fiscal measures may be needed to revive private-sector confidence and sustain growth.
Chinese authorities have signalled a willingness to step up fiscal support in 2026, including plans to issue ultra-long-term government bonds and measures aimed at boosting consumption, as the country navigates deflationary pressures and an uneven recovery.
Markets showed a muted reaction. Mainland China’s CSI 300 index edged higher, while the yuan traded largely flat against the U.S. dollar.
