Investing.com– The People’s Bank of China kept its benchmark loan prime rate unchanged on Friday, but is expected to eventually trim the rate further amid steadily deteriorating economic conditions in the country.
The PBOC kept its one-year LPR at 3.35%, while the five-year LPR, which is used to determine mortgage rates, was left unchanged at 3.85%.
The PBOC had last cut the rate in July, as it sought to further loosen economic conditions in the country and foster growth. Both LPR rates remained squarely in record-low territory.
The central bank is expected to cut the rate further in the coming months, especially as a string of recent economic readings showed little improvement in China. The country is grappling with persistent deflation and sluggish private consumption.
The LPR is determined by the PBOC based on considerations from 18 designated commercial banks, and is used as a benchmark for lending rates in the country. The five-year rate is closely tied to China’s property market, which has been struggling with nearly four years of slowing sales and an extended cash crunch.