The offshore yuan held steady around 6.81 per dollar on Monday, near its strongest level since February 2023, after China kept its key lending benchmarks unchanged. The one-year Loan Prime Rate (LPR) remained at 3.0%, while the five-year LPR stayed at 3.5%, marking the eleventh straight month without adjustment. This decision reflects a cautious approach by policymakers. While deflationary pressures have begun to ease and economic growth has shown early signs of resilience this year, policymakers remain alert to external risks, including ongoing tensions in the Middle East. Recent developments include the US seizure of an Iranian cargo ship over sanctions violations and Iran signaling it will not join a second round of talks previously expected by Washington ahead of a temporary ceasefire deadline. Nevertheless, the central bank has reiterated its commitment to a “supportive” and “moderately loose” monetary policy to sustain growth while maintaining currency and financial stability.