The over-five-year LPR, used by many lenders as a basis for mortgage rates, also stayed at its previous reading. The unchanged LPR was in line with market expectations.
China kept its benchmark lending rates unchanged in August, with the one-year LPR at 3 per cent and the over-five-year LPR at 3.5 per cent.
The decision was in line with market expectations as H1 2026 GDP grew 4.7 per cent YoY.
Monetary policy remains in an observation period, while policymakers are expected to maintain support and adjust tools as needed.
Wang Qing, chief macro analyst, Golden Credit Rating said the steady LPR rates followed China’s gross domestic product growth of 4.7 per cent year on year (YoY) in the first half of 2026, which was within the annual growth target of 4.5 to 5 per cent, while new quality productive forces represented by high-tech manufacturing were developing at an accelerated pace.
He further said: “This means that, although investment and consumption momentum has weakened since the second quarter and economic growth momentum has moderated, macro policies have maintained strong policy patience, and monetary policy remains in an observation period.”
Wen Bin, chief economist at China Minsheng Bank, also pointed to support from economic fundamentals, citing robust export growth and fast-growing value-added industrial output driven by high-tech and equipment manufacturing.
The policy outlook points to continued support, with monetary policy tools to be used comprehensively and adjusted in a timely manner.
Overall social financing costs remain at a relatively low level.
Fibre2Fashion News Desk
