China kept its benchmark lending rates unchanged for the sixth consecutive month today. One-year loan prime rate was held at 3.1% and the five-year LPR steady at 3.6%.
Subdued domestic inflation and growing global trade headwind, particularly the latest wave of tariff threats from the US, argue in favor of further policy easing However, PBoC appears reluctant to move ahead of Fed.
A premature rate cut could exacerbate downward pressure on the yuan, fueling capital outflows and financial instability.
