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Investing.com — The People's Bank of China kept its benchmark lending prime rate at a record low on Monday, as widely expected, limiting the bank's scope to further ease financial conditions and spur economic recovery. It shows that
In the People's Bank of China's first interest rate determination for 2024, the rate used to determine home loan interest rates remained unchanged at 3.45% and 4.20%.
Both LPR rates are at historic lows after a series of cuts over the past four years as the People's Bank of China eased monetary policy in the face of slowing economic growth.
Monday's move was broadly in line with market expectations after the central bank unexpectedly left medium-term lending rates unchanged in early January, but also maintained a near-record pace of liquidity injections.
The LPR is determined by the People's Bank of China based on consideration from 18 designated commercial banks and is used as a benchmark for domestic lending rates.
Over the past two years, the central bank has further cut interest rates to record lows as China struggles to further stimulate lending conditions and support economic recovery. But the measures have so far had little effect, with recent data confirming that post-COVID-19 economic recovery is all but unlikely to materialize in 2023.
China's fourth-quarter growth rate was weaker than expected, barely exceeding the government's annual target of 5%, as weak export demand added to economic pressure from weak domestic spending and investment.
The PBOC has also reiterated its reluctance to further reduce the LPR, stating that such measures could cause further weakness in the banking sector and destabilize the banking sector. Ta.
Investors are increasingly calling for more targeted fiscal measures from the Chinese government, as the People's Bank of China's liquidity measures have provided little support for the economy. However, such a move seems unlikely as China faces high levels of government debt.
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