China Holds Key Lending Rates Steady for Seventh Straight Month—What It Means for Digital Assets

No moves, no surprises. For the seventh consecutive meeting, China's central bank has kept its benchmark lending rates locked in place.

Stability as Strategy

This isn't a pause—it's a policy. While other major economies wrestle with inflation and rate hikes, Beijing is broadcasting a message of deliberate calm. The one-year and five-year loan prime rates (LPRs) are holding firm, a clear signal that supporting the domestic economy trumps external pressures. For a market addicted to stimulus whispers, the silence is deafening.

The Crypto Angle: Liquidity on the Sidelines

Here's where it gets interesting for digital assets. Stable rates in the world's second-largest economy mean capital isn't being aggressively sucked back into traditional finance. It's a holding pattern that often benefits alternative stores of value. When fiat systems opt for predictability, the appeal of decentralized, non-sovereign assets quietly grows. It's the financial equivalent of watching paint dry—until you realize the wall is made of gold.

A calculated standstill in Beijing could be the quiet catalyst for movement elsewhere. After all, in a world of financial repression, the best escape hatch isn't always a rate cut—sometimes it's a different ledger entirely. Just ask anyone who's watched a government 'manage' their currency into stability.

China’s housing crash deepens as property prices fall

Real estate is still a mess. Fixed asset investment, which includes infrastructure and property, dropped 2.6% between January and November compared to last year. That’s a sharper fall than the 2.3% economists expected.

The pain’s widespread. New home prices in Beijing, Guangzhou, and Shenzhen slipped 1.2% in November. Meanwhile, resale home prices plunged 5.8% from the year before. No part of the housing market is holding up.

At Cornell University, professor Eswar Prasad said that “some stimulus will help,” but warned that “monetary policy probably won’t get that much traction” with the private sector still fragile.

He added, “With growth momentum weakening, they’re going to have to turn on the stimulus taps, some monetary stimulus, perhaps, and ideally a little more fiscal stimulus, but that really needs to be packaged with some broader reforms.”

China’s finance ministry isn’t ignoring that. Earlier in December, they said they plan to issue ultra-long-term special government bonds in 2025 to support key infrastructure projects. Officials also promised to push forward actions to lift consumer spending, trying to stop deflation from setting in deeper. But even with that, investors aren’t getting excited.

Yuan stays soft despite temporary trade relief with Washington

The recent trade arrangement with Washington is giving China a short breather. Tariffs on Chinese exports have been suspended, which could support export growth in 2025. The country still hopes to hit its “around 5%” growth goal, but nothing is guaranteed. Domestic demand is still weak.

On the currency front, the yuan isn’t showing much strength. The onshore rate stayed flat at 7.04 per dollar on Monday. The offshore yuan weakened. Jason Schenker, president of Prestige Economics, said the yuan might push below 7.00 briefly over the next six months, but he doubts it’ll stay there.

“I’d be surprised if it was below seven for a sustained period. That WOULD be viewed probably as a challenge and risk in China.” He now sees the yuan ending 2026 around 7.03, slightly firmer than his earlier 7.05 call from November.

Schenker’s not buying into the bullish outlook some banks are pushing. Goldman Sachs, for example, thinks the yuan could go as high as 6.85 in twelve months.

But that view clashes with recent calls from inside China, where some former central bank officials and economists are arguing for a stronger yuan. Their pitch? It could help rebalance the economy and reduce trade pressure.

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