China’s Interest Rates Leave Room for Future Action, PBOC Says

The central bank last week refrained from cutting its key interest rates as it defended a depreciating yuan. Photo: Bloomberg

(Bloomberg) — China’s current interest rates are “reasonable” and provide room for future policy action, the People’s Bank of China said, amid expectations it may resume lowering rates in coming months.

Real interest rates in the country are “slightly lower” than the pace of potential economic growth, the central bank said in a statement posted late Tuesday on its verified WeChat account. Such a situation helps make debt sustainable and provides the government with “extra” policy scope, it said.