China keeps lending rates steady amid trade tensions

China decided to maintain its key lending rates on Thursday, as it tries to balance supporting growth and stabilising its currency in the face of increasing trade tensions.

The People’s Bank of China (PBC) kept the 1-year loan prime rate at 3.1 per cent and the 5-year LPR at 3.6 per cent unchanged since a 0.25 per cent cut in October.

The rate decision mirrors the US Federal Reserve’s decision to maintain benchmark interest rates, with Fed officials suggesting potential half-point rate cuts by 2025.

The PBC has maintained its 7-day rate, the main policy rate of the country, at 1.5 per cent since a reduction in October, as the central bank protects the yuan from downward pressure due to the possibility of increased tariffs.

Attribution: CNBC

Subediting: M. S. Salama