Published Mon, Jul 20, 2026 · 09:42 AM
[SHANGHAI] China kept benchmark lending rates unchanged for a 14th consecutive month on Monday (Jul 20), in line with market expectations.
The unchanged loan prime rates (LPRs) suggest that policymakers remain patient, keeping interest rates on hold despite softer-than-expected second-quarter economic data that underscored the uneven growth in the world’s second-largest economy.
The one-year LPR was kept at 3 per cent, while the five-year LPR was unchanged at 3.5 per cent.
In a Reuters survey of 23 market participants conducted last week, all participants predicted no change to either of the two rates.
China’s economy expanded at its slowest pace in more than three years in Q2, missing forecasts, with weak household consumption clouding strong manufacturing and exports and intensifying concerns over the long-term sustainability of its unbalanced growth model.
China’s economy is facing a structural mismatch between strong supply and weak demand, the People’s Bank of China (PBOC) said earlier this month, pledging to maintain an appropriately loose monetary policy and ramp up financial support to revive domestic consumption.
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Attention will be shifted to the upcoming Politburo meeting, where policymakers are expected to set the economic policy agenda for the second half of the year.
“All eyes are now on the end-July economy-focused Politburo meeting,” said Kelvin Lam, senior China+ economist at Pantheon Macroeconomics. “We will be looking for signs that policymakers recognise the importance of stabilising household balance sheets, potentially preparing a more comprehensive plan to stabilise the property sector and break the negative feedback loop between falling asset prices and weakening consumer confidence.”
“On the monetary side, low but positive inflation shouldn’t impede further People’s Bank of China easing if it is deemed necessary,” said Lynn Song, chief economist for Greater China at ING. “Policymakers have made efforts to maintain ample liquidity, and we expect there is a solid chance we will see a rate cut within the quarter.” REUTERS
