The People’s Bank of China maintained its benchmark interest rates for corporate and household loans at its February fixing, as widely expected after the central bank left borrowing costs on its medium-term lending facility (MLF) loans unchanged last week. The one-year loan prime rate (LPR) was kept unchanged at 3.7 percent following cuts of 5 and 10 basis points in December and January, respectively; while the five-year rate was retained at 4.6 percent after a 5-basis-point cut in January.
China’s central bank chief Yi Gang recently said that policymakers will keep their accommodative monetary policy flexible and appropriate while increasing support for key areas and weak links in the economy. He also mentioned that volatile internal and external conditions will create challenges for the economy and require more counter-cyclical policy adjustment.