In September, China’s central bank opted to keep its benchmark lending rates steady for the fourth month running, leaving the one-year Loan Prime Rate at 3.00% and the five-year rate at 3.50%. This move was in line with expectations, following the central bank’s decision to also maintain its seven-day reverse repo rate. Despite ongoing domestic challenges—including weak factory output and sluggish retail growth—China chose a cautious monetary stance.
The decision reflects a balance between stabilizing economic momentum and avoiding aggressive stimulus. Trade relations with the U.S. have eased somewhat, exports remain reasonably resilient, and equity markets are showing strength. Yet these positives stand against signs the economy is cooling. According to a survey of 20 financial analysts, all expected no change to the key rates this month. Many now see potential loosening measures in the fourth quarter—possible cuts to interest rates or the reserve requirement ratio—should external pressures remain manageable.
Looking forward, the October plenum is shaping up as a focal point. It’s expected to review policy frameworks tied to China’s 15th Five-Year Plan, which could include proposals for more accommodative monetary settings if growth continues to soften. For businesses and investors tracking China closely, keywords like “China LPR unchanged,” “monetary policy in China 2025,” “trade tension easing,” and “interest rate outlook China” are increasingly relevant.
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