The People’s Bank of China (PBOC) maintained key lending rates at record lows for the third consecutive month during the August fixing, in line with market expectations. The decision came despite recent economic data suggesting that the economy might be losing momentum. The one-year Loan Prime Rate (LPR) - the benchmark for most corporate and household loans - was kept steady at 3.0%, while the five-year LPR, which guides mortgage rates, remained unchanged at 3.5%. Data released last week showed that industrial output grew at its slowest pace in eight months in July, while retail sales posted their weakest growth since December 2024. Meanwhile, new yuan loans fell for the first time in 20 years, coming in well below analysts’ expectations, although broader credit growth showed some improvement. In its latest quarterly monetary policy implementation report, the central bank stated it would continue to implement and fine-tune a moderately loose monetary policy.