China Keeps Loan Rates Steady amid Slower Growth and a Strengthening Yuan
Feb 24th 2026
The People’s Bank of China left its 1-year and 5-year loan prime rates at 3% and 3.5% to balance support for a weak recovery with currency stability.
- PBOC held the 1-year and 5-year loan prime rates at 3% and 3.5% for a tenth consecutive month.
- China’s economy expanded 4.5% year on year in Q4, its slowest pace since the end of strict Covid curbs.
- Price pressures remain weak, with the GDP deflator negative for 11 straight quarters and December retail sales up just 0.9%.
- Policymakers are promoting services consumption, focusing on elderly care, leisure and tourism to boost spending.
- The offshore yuan has strengthened recently to about 6.889 per U.S. dollar as the central bank has allowed gradual appreciation by lowering daily fixings.
- A stronger yuan could hurt export competitiveness, and ING forecasts a trading band near 6.85 to 7.25 this year if Beijing maintains its currency goals.