DBS Group Research economist Chua Han Teng expects the People’s Bank of China to maintain its key one-year lending rate at 3.00% on February 24 as the January data release is still ongoing. The report shows that policy remains cautiously accommodative, reflected in a lower USD/CNY peg below 7.0, based on structural tools and broader monetary easing expected in the second half of 2026.
Loan interest rates remain unchanged for now
“The PBOC is expected to keep the 1-year prime rate (LPR) unchanged at 3.00% as January economic data has not yet been fully released.”
“The central bank maintains a cautiously accommodative monetary policy stance in the face of rising geopolitical tensions.”
“This stance is reflected in the lower USD/CNY fix, which has breached the psychological level of 7.0.”
“The PBoC is relying more on structural tools to support targeted sectors, rather than lowering the prime lending rate or the 7-day repo rate.”
“We expect the PBoC to resume broader easing towards the second half.”
(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor.)
