The Banco Popular de China building (PBOC) in Beijing, China, on Thursday, December 15, 2022.
Bloomberg | Getty images
China is expected to maintain its rates of the cousins without changes on Monday, with the 1 -year LPR at 3.1% and 5 years to 3.6%, since the Central Bank seems to prefer to stabilize the Yuan in the midst of commercial tensions with the United States.
The decision of the Popular Bank of China occurs when China reported more anticipated economic data this month, with the GDP of the first quarter that grows to 5.4% year after year.
Retail sales and industrial production numbers also exceed the expectations of economists surveyed by Reuters.
The 1 -year LPR influences corporate and domestic loans in China, while the 5 -year LPR serves as a point of reference for mortgage rates. The PBOC has maintained the stable LPRs since October last year.
The wait was in line with a survey by Reuters economists, with 87% waiting for the PBOC to keep the stable rates.
The Dutch bank also predicted in a note last week that the PBOC would probably maintain rates, with the analysts Lynn Song and Min Joo Kang pointing out that it was unlikely that the LPR changed without first reduced the seven -day repo rate.
The 7 -day repo rate is currently 1.5%, and was last reduced at 20 basic points in September.
However, Ing also said that “low inflation and strong winds against winds against in the middle of the tariff threats that grow provide a strong argument for flexibility. But currency stabilization considerations can make China’s Popular Bank wait until the federal United States cuts loans.”
The United States has imposed tariffs of up to 245% in Chinese imports, while China has slapped 125% of the drafts of US imports.
Although GDP growth figures were encouraging, consumer prices in the second largest economy in the world remained in deflation territory, with the reading of the CPI in March that shows that prices fell 0.1% year after year.
The prices of the producer fell 2.5% in March, marking the 29th consecutive month in Deflation and seeing the highest contract since November 2024.
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