Why the PBOC’s ‘Cautious’ Move Could Be the Hidden Key to Massive Market Shifts—Are You Ready to Capitalize?
Ever wonder why the People’s Bank of China seems to be playing the long game with its Loan Prime Rate? As we inch closer to February 24, all eyes are on the PBOC, which—according to DBS Group Research economist Chua Han Teng—is likely to hold steady at 3.00%. It’s like watching a suspense thriller unfold, with January’s economic data still trickling in and geopolitical tensions adding to the uncertainty. What’s fascinating is their cautious yet creative approach: instead of slashing rates willy-nilly, they’re leaning heavily on structural tools to lift specific sectors. It’s a masterclass in precision easing, signaling that broader monetary stimulus might just be around the corner—maybe in the latter half of 2026. If you’re curious about how this balancing act affects the USD/CNY fixing breaking the psychological 7.0 barrier, stick with me as we unpack what’s really going on behind those PBOC doors. LEARN MORE
DBS Group Research economist Chua Han Teng expects the People’s Bank of China to keep the 1-year Loan Prime Rate at 3.00% on February 24, as January data are still unfolding. The report says policy remains cautiously accommodative, reflected in a lower USD/CNY fixing below 7.0, with reliance on structural tools and broader easing anticipated toward the second half of 2026.
Loan Prime Rate seen unchanged for now
“The PBOC is expected to keep the 1-year Loan Prime Rate (LPR) unchanged at 3.00%, as January economic data have yet to fully unfold.”
“The central bank is maintaining a cautiously accommodative monetary policy stance amid heightening geopolitical tensions.”
“This stance is being reflected in a lower USD/CNY fixing, which has breached the psychological 7.0 level.”
“The PBoC has been relying more on structural tools to support targeted sectors rather than cutting the Loan Prime Rate or the 7-Day Reverse Repo Rate.”
“We expect the PBoC to resume broader easing toward 2H.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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