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China's central bank holds rates steady amid US tariffs and yuan weakness


Published on 2025-03-20 08:01:40 - Cryptopolitan
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  • China's central bank decided to keep key lending rates unchanged on Thursday, holding firm as the country deals with a weakened yuan, new US trade tariffs, and an economy that is still trying to stabilize.

The People's Bank of China (PBOC) decided to maintain its key policy rates, keeping the one-year medium-term lending facility (MLF) rate at 2.5% and the seven-day reverse repo rate at 1.8%. This decision comes amidst ongoing trade tensions with the U.S., which has imposed new tariffs on Chinese goods, and a weakening yuan, which recently hit a six-month low against the dollar. The PBOC's choice to hold rates steady reflects a cautious approach to managing economic stability, aiming to support the economy without exacerbating capital outflows or further weakening the currency. This move is also seen in the context of China's efforts to navigate through economic challenges like a property market slump, local government debt, and sluggish consumer spending, while trying to avoid a significant economic downturn.

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