China Holds Key Lending Rates Steady Amid Economic Slowdown

• China's central bank kept its benchmark Loan Prime Rates (LPR) unchanged for the eighth consecutive month, with the one-year LPR at 3% and the five-year LPR at 3.5%.
• The decision comes as China's economic growth slowed to 4.5% in Q4 2025, the slowest since 2022, with nominal GDP at 3.8%, its lowest in 50 years.
• Retail sales growth hit a three-year low of 0.9% in December, attributed to a housing slump, weak job market, and deflation.
• Despite concerns over domestic demand, the government plans aggressive fiscal and moderately loose monetary policies to stimulate recovery.
• New bank loans in 2025 fell to a seven-year low of 16.27 trillion yuan, but officials suggest room for further reserve ratio and policy rate cuts.

Why It Matters: China maintains key lending rates despite economic slowdown, signaling a cautious approach to monetary policy.