PBOC Holds Rates Steady Amid Economic Slowdown, Delaying Broad Stimulus

China's central bank has opted against immediate monetary easing despite the economy's weakest performance in 2025. The People's Bank of China reiterated its commitment to a 'moderately loose' policy stance in its quarterly report, conspicuously omitting any mention of imminent interest rate cuts or reserve requirement ratio adjustments.

Economic indicators paint a troubling picture: July saw sharp declines in infrastructure investment, consumer spending, and private sector demand. Yet the 5.3% GDP growth recorded for the first half of 2025 appears sufficient for policymakers to maintain their cautious approach. 'The emphasis on targeted measures signals limited appetite for broad-based easing,' noted Goldman Sachs economist Chen Xinquan.

Market observers now anticipate any significant stimulus will be deferred until clearer signs of deterioration emerge. This measured response comes as China grapples with the dual challenges of industrial overcapacity and escalating trade barriers—factors that have significantly constrained production and export activity.