The People's Bank of China kept its benchmark lending rates unchanged at record lows for the 16th consecutive month in September 2026, meeting market expectations. The one-year loan prime rate, the benchmark for corporate and consumer borrowing, was held at 3.0%, while the five-year LPR, the reference rate for residential mortgages, stayed flat at 3.5%. The central bank maintained a cautious monetary stance amid heightened Middle East geopolitical tensions, as strong global demand for AI-related goods continued to support Chinese exports. Domestic equities edged higher after the decision, with the Shanghai Composite gaining 0.4% to 3,925 and the Shenzhen Component rising 0.8% to 13,743. In currency markets, the offshore yuan held firm near 6.69 per dollar, its strongest level against the greenback since July 2022.
PBOC kept LPRs unchanged and the offshore yuan held firm near 6.69, its strongest since July 2022, favoring the yuan over the dollar.
PBOC held benchmark LPRs steady at record lows, a neutral monetary stance that gives no clear directional signal for the 10Y yield.
