Investing.com– The People’s Bank of China left its benchmark loan prime rate unchanged on Wednesday, with Beijing seeking more clarity on U.S. politics before unlocking more support for the economy.
The PBOC kept its one-year LPR at 3.10% after cutting it by 25 basis points in October. The five-year LPR, which determines mortgage rates, was left at 3.60% after a 25 bps cut in the prior month.
The LPR is determined by the PBOC based on considerations from 18 designated commercial banks, and is used as a benchmark for lending rates in the country.
Analysts had widely expected the LPR to remain unchanged this month, with Beijing seen awaiting more clarity on what a second Donald Trump presidency will entail for Sino-U.S. trade before unlocking more economic support.
China rolled out a slew of aggressive stimulus measures since late September to support growth. But the country held off on outlining more targeted fiscal measures, amid caution over increased trade tariffs under Trump, who has vowed to impose a 60% import tariff on all Chinese goods.
The PBOC was also seen as having limited space to cut interest rates further, especially as the Chinese yuan was battered following Trump’s election. The central bank had steadily cut the LPR further into record-low territory over the past two years to support growth.
But monetary measures have so far provided limited support to the Chinese economy, which is still struggling with persistent deflation and a property market slump.