Catenaa, Tuesday, September 23, 2025- China central bank kept its benchmark lending rates unchanged in September for the fourth consecutive month, signaling a cautious approach to monetary easing despite slowing domestic growth.
The one-year loan prime rate (LPR) remained at 3.0%, while the five-year LPR stayed at 3.5%, in line with market expectations.
The decision follows last week’s holding of the seven-day reverse repo rate, now the main policy rate, as authorities weigh economic headwinds including weak factory output and retail sales in August, the slowest growth since 2024.
Analysts note the central bank is balancing domestic slowdown with resilient exports and a stock market rally, supported by easing Sino-U.S. trade tensions.
Barclays and Societe Generale anticipate modest rate cuts in the fourth quarter, potentially including a 10-basis-point reduction in LPR and a 50-basis-point reserve requirement ratio adjustment.
The upcoming fourth plenum in October will also review China’s 15th Five-Year Plan proposals, which may guide future monetary policy decisions.
Meanwhile, recent remarks by President Donald Trump indicated progress in U.S.-China negotiations, including a TikTok agreement and an upcoming face-to-face meeting with President Xi Jinping in South Korea to discuss trade, illicit drugs, and the war in Ukraine.
The backdrop of easing geopolitical tensions and supportive trade developments is expected to influence Beijing’s policy decisions in the coming months.
China’s benchmark Shanghai Composite Index has been hovering near 10-year highs, reflecting investor optimism despite mixed economic signals, as the government treads carefully between growth support and financial stability
