The People’s Bank of China kept key lending rates at record lows during the July fixing, in line with expectations. The decision came amid mounting signs of slowing growth momentum, weighed down by sweeping US tariffs, sluggish domestic demand, and a prolonged property slump. The one-year loan prime rate (LPR) - the benchmark for most corporate and household loans - was held steady at 3.0%, while the five-year LPR, which guides mortgage rates, remained unchanged at 3.5%. Data released last week showed GDP grew by 5.2% in Q2, slightly above expectations of 5.1%, though down from 5.4% growth in each of the previous two quarters. For H1 of 2025, the economy expanded by 5.3%, even as deflationary pressures persisted, with producer prices falling the most since July 2023. Meanwhile, new bank lending exceeded expectations, reaching its highest level in three months. In May, the central bank cut borrowing costs by 10 basis points to help cushion the economy from the impact of US tariffs.