The People’s Bank of China (PBoC) has set up a fintech committee.
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China kept its key lending rates unchanged Thursday, as Beijing prioritizes financial stability over interest rate easing to bolster the economy.
The People’s Bank of China held the 1-year loan prime rate unchanged at 3.1%, and the 5-year LPR at 3.6%.
The benchmark lending rates — normally charged to banks’ best clients — are calculated monthly based on designated commercial banks’ proposed rates submitted to the PBOC. The one-year LPR influences corporate loans and most household loans in China, while the five-year LPR serves as a benchmark for mortgage rates.
The decision on Thursday was in line with expectations Reuters poll estimates.
PBOC Governor Pan Gongsheng said at a conference in Saudi Arabia on Sunday that a stable yuan has been critical to maintaining global financial and economic stability. While many currencies have fallen against a stronger U.S. dollar, the yuan has remained largely stable, he added.
The Chinese yuan has fallen 2.5% against the greenback since Donald Trump’s election victory in November.
Pan also noted that China was increasingly prioritizing consumption while reiterating Beijing’s commitment to adopt a proactive fiscal policy and an accommodative monetary policy this year.
The PBOC has in recent months sought to defend the yuan as it faces downward pressure amid threats of higher tariffs, complicating its task to stimulate a faltering economy.
The strategy of defending the yuan carries risks for the economy, as a weaker yuan could help keep Chinese exports competitively priced abroad, while a stronger currency makes imports more expensive at a time when consumer demand is already fragile.
Since the inauguration last month, U.S. President Donald Trump has imposed a 10% tariff on all imports from China, on top of existing tariffs of up to 25%.
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