The People's Bank of China (PBoC) has kept its benchmark lending rates unchanged at record lows for the 11th consecutive month in April, aligning with market expectations. The one-year loan prime rate (LPR) remains at 3.0%, while the mortgage-linked five-year LPR is held at 3.5% [1]. This decision comes after China's first quarter GDP expanded by 5% year-on-year, surpassing expectations and reaching the upper end of Beijing's annual growth target range of 4.5% to 5% [1].
Commerzbank analysts Charlie Lay and Henry Hao note that the robust economic performance has reduced the pressure for broad rate cuts, allowing the PBoC to pause and assess the recovery trajectory [1]. The central bank has stated its commitment to maintaining a supportive and moderately loose policy stance to bolster domestic activity while ensuring currency stability [1].
In the foreign exchange market, both USD/CNY and USD/CNH were flat at around 6.82, remaining near their strongest levels since early 2023 [1]. This stability reflects the PBoC's ongoing efforts to preserve currency strength amid policy support [1].
No forward-looking analyst opinions or additional market reactions were provided beyond the central bank's stated policy direction [1].
CONCLUSION
The PBoC's decision to keep lending rates unchanged signals confidence in China's economic recovery, supported by strong Q1 GDP growth. Currency stability and a commitment to a supportive policy stance suggest a balanced approach, with no immediate need for further easing. Market impact is medium, as the move aligns with expectations and maintains stability.