China keeps benchmark lending rates unchanged as it contends with a weakening yuan

China left its benchmark lending rates unchanged Monday, as Beijing contends with a weakening yuan while awaiting policy clues from the incoming Donald Trump administration.

The People’s Bank of China held the 1-year loan prime rate at 3.1%, and the 5-year LPR at 3.6%, according to the PBOC statement.

The 1-year LPR determines rates on corporate and most household loans, while the 5-year LPR acts as a reference for mortgage loans.

The decision came ahead of Donald Trump’s inauguration to be the next president of the U.S. on Monday.

China’s offshore yuan has lost more than 3% since Donald Trump’s presidential election victory in early November. The tightly-controlled onshore yuan has also retreated to near a 16-month low.

China’s economic activity accelerated more than expected in the final quarter of last year, as Beijing’s stimulus measures announced since last September kicked in and helped the economy meet its annual growth target.

Despite the upbeat headline figures, economists cautioned that some underlying growth drivers might be temporary, amid weak consumer demand, a deepening property market slump and looming tariff hikes from the incoming Trump administration.

PBOC governor Pan Gongsheng had flagged in September the possibility of a cut in the reserve requirement ratio, which would free up more cash for banks to lend, by the end of 2024. But the cut has not arrived, despite its shift to “moderately loose” policy stance.

The PBOC had surprised the markets by shaving the major short- and long-term lending rates in July, followed by a widely-anticipated 25-basis-point cut in October. The central bank had kept the lending rates unchanged in November and December.