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Investing.com-- The People’s Bank of China left its benchmark loan prime rate unchanged as widely expected on Monday, with policymakers seen remaining cautious amid a recent spike in U.S.-China trade tensions.
The LPR was left at record-low levels, with China seen keeping monetary policy ultra-loose to offset a years-long disinflationary trend.
The PBOC left its one-year LPR at 3.0%, while the five-year LPR, which is used to set mortgage rates, was kept at 3.50%, as expected.
The LPR is set by the PBOC using considerations from 18 designated commercial banks, and serves as a benchmark for lending rates, especially mortgages, in China.
The hold was widely expected, with Beijing seen making few changes as it navigates heightened trade tensions with the United States.
U.S. President Donald Trump earlier in October threatened to impose 100% tariffs against China, although he tempered his rhetoric last week.
China had signaled that it remained ready to fight any trade war. But a swathe of recent economic readings showed the world’s second-largest economy remained on the backfoot, especially amid sustained manufacturing headwinds and rampant disinflation.
Beijing is widely expected to dole out more economic support in the coming months to offset this trend.