China is keeping its benchmark lending rates steady as Beijing explores stimulus measures

China’s central bank on Wednesday kept key lending rates unchanged, as Beijing assesses the effects of its latest stimulus measures.

The People’s Bank of China said it would keep the one-year lending rate at 3.1%, and the 5-year LPR at 3.6%.

Market watchers polled by Reuters had expected the PBOC to keep lending rates unchanged this month.

There was “no immediate need to adjust the LPR this month,” said Bruce Pang, chief economist and head of Greater China research at JLL, adding that China’s leaders may still be assessing the impact of recent measures aimed at boosting the economy.

Record-low interest rates at China’s commercial banks have limited their ability to support low lending rates, Pang said, “while another policy rate cut before the end of the year seems unlikely, there is still a possibility of interest rate cuts in 2025.”

The 1-year LPR covers most business and household loans in China, while the 5-year LPR serves as a benchmark for loan rates.

The rate decision came after a 25 basis point cut in the 1-year and 5-year LPRs last month, and followed China’s economic data for October that underscored the lack of momentum in the economy, despite recent stimulus announcements.

In October, China reported slower-than-expected industrial production and growth in fixed asset investment. The annual decline in housing investment from January to October was also significantly lower than last year.

Only retail sales beat expectations, rising 4.8% year-on-year, indicating that recent momentum has begun to seep into certain sectors of the economy.

Since late September, Chinese authorities have made announcements to encourage economic growth, which has been dragged down by a prolonged asset crisis and weak consumer and business sentiment.

Earlier this month, the Finance Ministry unveiled a five-year 10 billion yuan ($1.4 trillion) funding package to address local governments’ debt problems, while signaling that more economic support could come next year.

China’s central bank also planned to maintain a supportive monetary policy, said Governor Pan Gongsheng, who had indicated in October that there was still little room to cut key policy rates by the end of the year.

Morgan Stanley expects China’s growth to slow to 4% over the next two years, and downgraded Chinese stocks to “slightly underweight” in a note on Sunday, citing low inflation and rising trade tensions as risks.

“We see a very small chance that the Chinese government will put forward enough money to stimulate housing consumption,” analysts said.

Goldman Sachs also estimated that China’s GDP growth could slow to 4.5% in 2025, from 4.9% this year, according to the bank’s paper on Monday.

Goldman, however, maintained an “overweight” stance on China stocks, predicting a 13% rise in the benchmark CSI 300 index next year.

Donald Trump’s election victory, which is likely to bring higher tariffs on Chinese exports, has added to uncertainty about China’s struggling economy.