China Expected to Keep Lending Rates Unchanged for 14th Consecutive Month

 

Officials are expected to keep China's benchmark lending rates unchanged as policymakers monitor slowing economic growth.

China Expected to Keep Lending Rates Unchanged for 14th Consecutive Month

SHANGHAI — July 18, 2026

China is widely expected to keep its benchmark lending rates unchanged for a 14th consecutive month, according to a Reuters survey of market participants, despite signs of slowing economic growth.

Analysts expect the one-year Loan Prime Rate (LPR) to remain at 3.00%, while the five-year LPR, which serves as a key reference for mortgage lending, is forecast to stay at 3.50%.

The expectations come after China's economy expanded at its slowest pace in more than three years during the second quarter of 2026. Weaker household spending has continued to weigh on domestic demand, even as exports and manufacturing have remained relatively strong.

Economists say the country's recovery remains uneven, with export-driven industries outperforming sectors that rely on consumer spending.

Despite the softer economic data, most analysts believe the People's Bank of China (PBOC) is unlikely to introduce immediate interest-rate cuts. Instead, policymakers are expected to focus on targeted fiscal measures and maintaining stable liquidity in the financial system.

Attention is now shifting to the upcoming Politburo meeting, where Chinese leaders are expected to announce economic priorities for the second half of the year.

Some financial institutions, however, believe further policy support remains possible. Analysts at Citi have suggested that the central bank could introduce a modest 10-basis-point interest-rate cut later this year if economic conditions continue to weaken.

China's next official Loan Prime Rate announcement is expected on Monday, when investors will closely watch for any changes in monetary policy.