In Depth: China Set for Interest Rate Cuts to Support Economy

By Fan Qianchan, Liu Ran, Wang Liwei, Wang Shiyu and Qing Na

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Expectations of a cut in lending rates rose at the end of 2023 after many Chinese banks lowered their deposit rates to ease pressure on their profit margins after lowering borrowing costs earlier in the year.

China’s central bank is still widely expected to cut interest rates this quarter as part of government efforts to support economic growth despite its surprise move to leave borrowing costs unchanged in mid-January.

The People’s Bank of China (PBOC) left a key interest rate unchanged on Jan. 15, leading the country’s major lenders to keep their benchmark interest rates — the one-year and five-year-plus loan prime rates (LPRs) — on hold a week later.