China keeps benchmark lending rates unchanged as it contens with a weaqening yuan

China Left Its Benchmark Lending Rates Unchanged Monday, as beijing contends with a weightning yuan while awaiting policy clus from the Incoming Donald Trump Administration.

The people’s bank of china help the 1-yar loan prime rate at 3.1%, and the 5-yar lpr at 3.6%, according to the pboc statement.

The 1-Year lpr determines rates on corporate and most household loans, while the 5-yar lpr acts as a reference for mortgage loans.

The decision came ahead of Donald Trump’s Inaugence to be the next President of the us on Monday.

“The government is willing to delay interest rate and give exchange rate stability higher priority,” Said zhiwei zhang, president and chief economist at PINPOIT ASSET MANAGEMENT.

He added that “beijing will likely evaluate the impact of the trade policies in the us in coming weeks and decide how to respond after the chinese new year.”

Mainland China’s Benchmark CSI 300 Index Jumped 1.08%, Folling the Rate Decision. The offshore yuan strengthed 0.20% to 7.3244 per us dollar, while the onshore yuan tradeed at 7.3157 per dollar. China’s 10-Year Government Bond Yields Helde Steady at 1.661%, according to the lseg data.

“The seemingly Good Growth Number” and a Strong Greenback Prevented China from cutting rates on monday, said gary ng, Senior Economist at Natixis. “While China Needs Lower Interest Rates to Boost Demand, Policymakers Want to avoid a sharp decline in bond yields and the yuan.”

NG expects China to cut rates by 50 basis points this year, although the Timing will depend on external monetery conditions, namely the Us federal reserve’s Easing Steps.

The PBOC has ramped up measures lately to forest a sharp fall in the currency that could spark excessive Volatiity while Stressing the Importance of Foreign Exchange Stability.

China’s offshore yuan has lost more than 3% SINCE DONALD Trump’s Presidential Election Victory in Early November. The tightly-contracted onshore yuan has also retreated to near A 16-month low,

The Us dollar index.

China’s Economic Activity Accelerated more than expected In the final Quarter of Last Year, as Beijing’s Stimulus Measures Announced Since Last Septe Septe Sppend in and Helped The Economy Meet Its Annual Growth Target.

Despite the Upbeat Headline FiguresEconomists caumened that some underling grovers might be temporary, AMID Weak Consumer Demand, A Deepening Property Market Slump and LOMING TARIFF HEKEF HIKEF HIKEF HIKEF HICEF HIKEF HINDESTION

Pboc governor pan gongsheng Had Flagged in September The Possibility of A Cut in the reserve requirement ratio by the end of 2024, depending on market’s liquidity condition. The RRR determines the amount of cash that banks must hold in reserve.

But the cuts are yet to materialize, despite The pboc’s shift to a “moderately loose” policy stance,

Any policy moves by the pboc in the Near Term Are Likely to Hinge on Trump’s Trade Policy Announcements, Helen Qiao, Chief Greater China Economist and Head of Asia Economics at Bofa Global Resech Said in AN Ursday.

“Any Potential Surprise of Immediate and Sharp Increase in Tariffs would warrant more immediative policy responses,” She added.

The PBoc had surprised the markets by shaving short- and long-term lending rates in julyFollowed by A widely-investment 25-Basis-Point Cut in OctoberThe Central Bank Had Kept the lending rates unchanged in November and December.

Markets Have Pared Expectations for the number of rate cuts by to cme fedwatch tool as of Monday,