The National Interbank Funding Center said on Sunday that China would keep its benchmark lending rates unchanged for the 16th consecutive month, continuing to support the economy by keeping borrowing costs at low levels.
Stable borrowing costs
The one-year benchmark lending rate was held at 3%, while the rate for loans of more than five years remained at 3.5%. Several banks use the longer-term rate to set mortgage rates.
The benchmark lending rates are published monthly and reflect financing costs for households and companies. They are also used as a reference for pricing bank loans. Lower rates help ease borrowers' burdens and support investment and consumption.
Economic indicators reduce need for a cut
Wen Bin, chief economist at China Minsheng Bank, said the decision to keep rates unchanged was partly due to the resilience of the economy. He pointed to continued export growth and higher year-on-year growth rates for both the consumer price index and the producer price index, as well as a marked acceleration in industrial output growth last August.
Wen Bin added that lending rates remained relatively low last August, providing strong support to the real economy and reducing the need for a cut in the benchmark interest rate.
