The Banque Populaire Banque de China (PBOC) building in Beijing, China, Thursday, December 15, 2022.
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China was waiting to maintain its loan administration unchanged on Monday, the LPR at 1 year at 3.1% and 5 years at 3.6% while the central bank seems to focus on the stabilization of the Yuan in the midst of trade tensions with the United States
The decision of the Banque Populaire de China comes when China has reported economic data better than expected this month, the GDP of the first quarter increasing by 5.4% over a year, which makes it possible to maintain stable rates.
Retail sales and industrial production numbers for Mars also beat the expectations of economists interviewed by Reuters.
The 1 year LPR influences companies and most households in China, while the 5 -year LPR serves as a reference for mortgage rates. The PBOC has maintained stable LPRs since October of last year.
After the announcement, the Chinese yuan on the ground Exchanged flat at 7.2995 for the dollar, while the Yuan Offshore has marginally reinforced 7,2962 against the greenback.
The CSI 300 in continental China increased by 0.36%.
The PBOC’s decision was in accordance with a reuters survey of economists, 87% expected the PBOC to maintain stable rates.
Dutch Bank Ing also planned in a note last week that the PBOC would probably hold rates, Lynn Song and Min Joo Kang analysts stressing that the LPR should not change without the 7 -day replenishment rate being reduced first.
The 7 -day repo rate is currently 1.5% and has been reduced for the last time by 20 base points in September.
However, ING also said that “low inflation and high external opposites in a case of increased tariff threats provide a solid argument for relaxation. But currency stabilization considerations can encourage the Popular China Bank to wait for the Federal Reserve for Borrowing Reserve”.
The United States has imposed prices of up to 245% on Chinese imports, while China has slapped 125% of rights over American imports.
While GDP growth figures were encouraging, consumer prices in the second world economy have remained in deflationary territory, reading the IPC showing that prices dropped by 0.1% over a year.
The prices of producers fell 2.5% in March, marking the 29th consecutive month in deflationary territory and seeing the greatest contraction since November 2024.
