The LPR for maturities of five years or more, commonly used by commercial banks as a reference for mortgage lending, was also maintained at 3,5%. These reference lending rates are published monthly, reflecting borrowing costs for businesses and households. Lower interest rates would ease financial pressure on borrowers, while also encouraging investment and consumption.

Both rates have been kept unchanged since 6/2025. Today's decision also aligned with a previous Reuters survey of analysts.

Benchmark lending rates were maintained after China's economy accelerated in QIII, with GDP growing 4,5% compared to the same period last year.

According to China Daily, Chinese credit rating agency Golden Credit Rating assessed that monetary policy would maintain its current direction. Following the implementation of measures aimed at stabilizing growth and supporting the housing market, the world's second-largest economy will enter a phase of monitoring policy effectiveness. Reference lending rates are therefore expected to remain stable.

In QIII, manufacturing and exports continued to drive China's growth, even as domestic consumers tightened spending. Analysts anticipate Beijing will achieve its 4,5-5% growth target this year without needing further stimulus.

China's decision comes as many major economies have recently tightened monetary policy to curb inflation. Last month, the central banks of Japan, the US, and the European Union all raised their benchmark interest rates. Australia and New Zealand have even raised rates multiple times this year.

This week, Beijing will host an important financial forum. Investors will closely monitor statements from Pan Gongsheng, Governor of the People's Bank of China (PBOC), to anticipate the central bank's monetary policy. Long-term Chinese government bond yields currently remain at a 15-year low.

Ha Thu (according to Reuters, China Daily)