China kept its benchmark lending rates at record lows for a 16th consecutive month in September, signaling continued caution from policymakers as they weigh weak domestic demand.
The one-year Loan Prime Rate, the benchmark for most corporate and household borrowing, was held at 3%, while the over-five-year LPR, a key reference for mortgages, remained at 3.5%, according to the People's Bank of China.
The decision was in line with expectations and came as the yuan continued to strengthen, while some other central banks moved toward higher rates.
The steady stance also suggests policymakers remain mindful of the pressure that further easing could place on banks' margins.
Recent data have offered a mixed picture of the economy. Industrial production growth accelerated, while retail sales growth slowed and fell short of expectations.
New yuan lending returned to growth in August after a contraction in July, but remained below forecasts as weak household and corporate borrowing demand continued to weigh on credit growth.
The property market remained a drag, with home prices declining in August. The pace of the decline, however, was the slowest in eight months, suggesting government support measures may be beginning to cushion the downturn.
The decision leaves the LPRs unchanged as policymakers appear to be relying on targeted support and existing measures to shore up growth, while keeping room to respond if domestic demand weakens further.
