Please enable JavaScript to access this page.
Breaking News

China keeps benchmark lending rates steady ahead of key annual meeting

Beijing, China – January 06: The China People’s Bank building was seen on January 6, 2025 in Beijing, China.

China Visual Group Gety pictures

Economists told CNBC, after next month, after the annual meeting of the parliamentary country. Keep the basic loan prices fixed Thursday.

The Chinese People’s Bank of LPR 1 year was held by 3.1 %, and 5 years of LPR with 3.6 %. The decision was in line with Reuters poll estimates.

LPRS – Lashing fees are usually imposed on the best bank customers – It is calculated monthly based on the proposed rates of the designated commercial banks provided to PBOC. For one year, LPR affects corporate loans and most of the household loans in China, while LPR for five years serves as a criterion for mortgage rates.

“Pressing the net interest margins of banks and the exchange rate is amid a slower pace to reduce the Federal Reserve, all of which lead to the stability of the policy price in China,” said Bruce Bang, Assistant Professor at the Chinese College at Hong Kong University at Hong Kong College of Business..

However, Bang expects a 50-Basis reduction to the rate of reserve requirements as soon as possible next month and the reverse ribio rate is expected to be reduced for 7 days-the country’s main policy-40 to 50 basis points this year.

The Chinese Central Bank often uses the reverse ribau rate for 7 days-which controls the amount of liquidity in the banking system-to indicate the intentions of the monetary policy and direct LPR in the desired direction.

PBOC has maintained a fixed rate of 7 days 1.5 % since a reduction in SeptemberAs a central bank He sought to defend the yuan because he faces the downward pressure Amid the threats of high definitions, which complicates its task to stimulate the struggling economy.

“We are still thinking [the 7-day rate] Lin Song, the chief economist in Ji, said he had a decent opportunity to reduce it in the first quarter, as the real interest rate is still relatively high. PBOC is expected to reduce prices after the annual parliamentary meeting in Beijing next month.

“Reducing prices can help encourage investment and consumption,” Song said, adding that pressure on Yuan has recently calmed down, making the case to reduce prices.

China is scheduled to lead the goal of its growth for 2025 at its parliamentary meeting headed by Xi Jinping. The event, which usually lasts about a week, is scheduled to start on March 5.

Politics makers may maintain the goal of the official real growth unchanged at “about 5 %” while reducing the goal of consumer enlargement to “about 2 %” of “about 3 %” last year, according to Goldman Sachs.

Wall Street expects policy makers to repeat their pledges to cash mitigation at the meeting while committing to install the yuan in a “reasonable scope”.

However, the yuan’s support comes with risks to the economy, as the weakest yuan can help maintain Chinese exports at competitive prices abroad, while the strongest currency makes imports more expensive while demanding the consumer was weak.

Pan Gongsheng Governor Pan Gongsheng He said at a conference in the Kingdom of Saudi Arabia on Sunday Yuan is stable was decisive to maintain global financial and economic stability. He also repeated Beijing’s commitment to adopting a preemptive financial policy and a distinguished monetary policy this year.

The yuan abroad has decreased nearly 2.5 % against Greenback since Donald Trump’s electoral victory in November, after recovering some losses in recent weeks. 0.20 % on Thursday is reinforced to trade at 7.2673 on the dollar.

It stimulates growth against the constant yuan

PBOC field to lower LPR in the coming months: Allianz Global Investors

While PBOC officials said late last year, they are Do you reduce bank reserve requirements? And interest rates at “Time”, price discounts have not yet been achieved, as policy makers face more trade tensions with the United States

Since the opening last month, US President Donald Trump Imposing a 10 % tariff on all imports From China, in addition to the current definitions of up to 25 %.

However, the market concerns about commercial tensions give up, after the reports Trump may compel a large -scale deal with ChinaA team of analysts at DBS said in a note on Thursday.

The bank said: “The increasing hopes of a comprehensive deal in the United States of China may limit any deterioration in RMB feelings to move forward, even as markets are waiting for more customs tariffs,” the bank said.

Restricting the steps to reduce PBOC is also the slow pace of the Federal Reserve with policy discounts. US Federal Reserve officials have agreed that they would need to see inflation decreased before reducing interest rates, he said Minutes of their meeting in January, it was released on Wednesday.

https://image.cnbcfm.com/api/v1/image/108104863-1740053249386-gettyimages-2192627338-vcg111540435779.jpeg?v=1740053261&w=1920&h=1080

2025-02-20 14:08:00

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button