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PBOC holds LPR despite economic slowdown

PBOC holds LPR despite economic slowdown

After holding interest rates unchanged last week, the People’s Bank of China opted to keep its lending benchmark rate steady on Monday, ignoring calls for rate cut to boost the undergoing economic slowdown.

The PBOC left the one-year loan prime rate (LPR) at 4.15 percent, unchanged for a second straight month, and the five-year LPR at 4.80 percent.

Last week, China’s central bank has added 300 billion yuan through medium-term lending facilities, but it held the borrowing cost at 3.25 percent, adding some pressure on the yuan.

Some analysts have been calling for rate cuts to boost the world’s second-biggest economy after it reported its slowest growth in nearly three decades in 2019.

As of 07:51 GMT, the offshore yuan (USDCNH) soared 0.09 percent to 6.8601 per dollar after the pair fell to a low of 6.8458, which is the lowest since in six months.

The dollar index was little changed at 97.35, amid absence of economic data from the United States and bank holiday due to the Martin Luther King Day.

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