China Keeps Lending Rates Unchanged for Fourth Straight Month

China’s central bank held its key benchmark lending rates steady in September, marking the fourth consecutive month without change as policymakers weigh the need to stabilize growth against concerns about financial stability.

The People’s Bank of China (PBOC) kept the one-year Loan Prime Rate (LPR) at 3.35% and the five-year LPR at 3.85%, in line with market expectations. These rates serve as the main reference for household and corporate borrowing, including mortgages, and are closely watched as a signal of Beijing’s monetary stance.

The decision reflects a cautious policy approach. On one hand, China continues to face headwinds from subdued consumer spending, a prolonged property downturn, and weaker export demand. On the other hand, policymakers are wary of cutting too aggressively, which could put pressure on the yuan and accelerate capital outflows at a time when global interest rates remain comparatively high.

Analysts say the hold demonstrates a “wait-and-see” strategy. While the PBOC has introduced targeted liquidity injections and support programs for housing and infrastructure, it has stopped short of broad-based rate cuts. By maintaining current levels, officials appear to be assessing how previous measures are filtering through the economy before deciding whether further easing is warranted.

Markets largely anticipated the move, and investor reaction was muted. However, the decision keeps attention on the final months of 2025, when economists expect Beijing may roll out additional stimulus if growth momentum falters. Some forecasts point to the possibility of selective credit easing, particularly for the real estate and manufacturing sectors.

For now, the steady rates signal patience and prudence. The PBOC’s stance underscores the challenge of supporting recovery without undermining currency stability, highlighting the delicate balance Beijing faces as it navigates domestic weakness and global financial uncertainty.