China holds interest rates steady despite COVID, Ukraine woes

China held key interest rates for corporate and household loans steady on Wednesday, a surprise move that signals Beijing remains cautious about policy easing even as COVID-19 and the Ukraine war weigh on growth.

The People’s Bank of China (PBOC) kept the one-year loan prime rate at 3.7 percent and the five-year rate at 4.6 percent.

Most economists, including a majority of the 28 traders and analysts surveyed in a snap poll by the Reuters news agency this week, had expected the central bank to cut rates amid slowing economic growth due to COVID-19 lockdowns and the conflict in Europe.

The central bank’s benchmark rates respectively affect the cost of new and outstanding loans and mortgages.