China keeps rates unchanged as expected

China kept benchmark lending rates unchanged at the monthly fixing on Wednesday, aligning with market expectations, Reuters reported.

The People’s Bank of China (PBOC) maintained a stable key policy rate last week amid some signs of improvement in the overall economy.

China has set an ambitious economic growth target of around five per cent for 2024, prompting the need for additional stimulus measures, including monetary and fiscal easing.

Reviving the struggling property sector is crucial, as most loans in China are tied to the one-year loan prime rate, impacting mortgage pricing.

However, significant interest rate cuts could strain the yuan and banks facing declining net interest margins since last year.