MNI BRIEF: China FEB LPR Remains Unchanged

China's Loan Prime Rate held steady on Tuesday, in line with expectations, as the central bank kept its benchmark policy rate unchanged while awaiting clearer easing signals and stimulus measures expected to be outlined during March’s Two Sessions.

According to a statement on the website of the People’s Bank of China, the LPR remained at 3.0% for the one-year maturity and 3.5% for the five-year tenor and above, marking a ninth consecutive month without change. Both rates were last cut by 10 basis points in May 2025 after the PBOC lowered its seven-day reverse repo rate – its key policy rate – by 10bp to 1.4% on May 8. The move was followed by a 50bp reduction in the reserve requirement ratio on May 15, largely aimed at cushioning the impact of tariff-related shocks. (See MNI PBOC WATCH: FEB LPR To Hold As Two Sessions Approach)

Advisers expect authorities to tolerate a moderation in headline growth in 2026 as weak domestic demand and export headwinds persist, while policymakers remain wary of deploying large-scale stimulus that could constrain future policy flexibility.