BEIJING, CHINA – NOVEMBER 11: The national flag of China flies in front of the headquarters of the People’s Bank of China (PBOC) on November 11, 2025, in Beijing, China. The PBOC serves as the country’s central bank, overseeing monetary policy, financial regulation, and currency issuance. (Photo by Cheng Xin/Getty Images)
Cheng Xin | Getty Images News | Getty Images
China left benchmark lending loan prime rates, or LPRs, for March unchanged on Friday, keeping them steady for the 10th straight month, in line with market expectations.
Why it’s important
The steady loan prime rate (LPR) fixings suggested that surging global oil prices amid escalating Middle East tension may cloud the outlook for inflation.
This year’s slightly lowered growth target could also reduce urgency for fresh stimulus measures, prompting some market analysts to postpone forecasts on the timing of interest rate cuts.
By the numbers
The one-year loan prime rate (LPR) was kept at 3.0%, while the five-year LPR was unchanged at 3.5%.
All 20 market participants in a Reuters survey this week predicted no change to either of the rates.
Context
Beijing set a slightly lower target for economic growth of 4.5% to 5% for 2026, down from last year’s expansion of 5%, reducing the urgency to roll out stimulus to support the economy, market watchers said.
China’s economy began the year on a firmer footing as factory output quickened, while retail sales and investment rebounded in the January-February period.
Major global central banks, such as the U.S. Federal Reserve, the Bank of Canada, Bank of England and the European Central Bank stood pat on rate decisions this week.
Top central banks said on Thursday they stood ready to tackle any surge in inflation with tighter policy, as an escalation in the Iran war put the Middle East’s vital energy infrastructure in the line of fire and drove fuel prices higher.
Key quotes
** CITI: “We now see a rate/RRR cut as more likely in Q2 2026 or even later. “In general, we believe China is relatively less exposed to the Mideast risks, with most of the impact concentrated in the price/reflation channel rather than real activity.”
** NOMURA: “We push out the 10-basis-point policy rate cut to Q4 from our previous forecast of Q2. We will closely monitor the development of inflation pressures in mid-2026 and revisit our forecast at that time.”
