On February 20, 2025, the People's Bank of China (PBOC) opted to maintain its benchmark loan prime rate amid ongoing economic concerns.

The one-year loan prime rate remains at 3.10%, while the five-year rate, crucial for mortgage pricing, is steady at 3.60%.

These rates are currently at record lows, following a series of cuts over the past two years aimed at stimulating economic growth and revitalizing the property market.

Although further interest rate cuts are expected, the PBOC's ability to ease monetary policy is constrained by the depreciation of the yuan.

The PBOC's decision comes as the yuan weakens, having recently reached an over one-year low in January 2025.

This economic backdrop is further complicated by an ongoing trade war with the United States, which began with President Donald Trump's implementation of 10% tariffs on Chinese goods.

In retaliation to these tariffs, Beijing has enacted its own trade measures, adding to the prevailing economic uncertainty.

In light of these challenges, there is growing speculation about potential fiscal stimulus measures from Beijing to encourage consumer spending.