PBoC holds firm on rates

The People's Bank of China (PBoC) kept its benchmark lending rates unchanged at record lows

By Ahmed Azzam | @3zzamous | 20 December 2023

Market open
  • PBoC retains benchmark lending rates to support economy.

  • Gold price steadies near $2,040, amidst US rate cut speculations.

PBoC's steady rate approach

the people's bank of china (pBoC) concluded its final rate-setting meeting of the year by maintaining its benchmark lending rates at record lows. The decision, aimed at reviving a sluggish economy, saw the one-year loan prime rate (LPR) remain at 3.45% for the fourth month and the five-year rate at 4.2% for the sixth month. This move reflects the central bank's ongoing efforts to bolster economic growth amidst challenging conditions.

Gold's response to interest rate discussions

gold prices hovered around $2,040 an ounce on wednesday, remaining close to the highest levels seen in more than two weeks. This stability comes despite recent remarks from US federal reserve officials, which have slightly impacted market expectations for interest rate cuts next year. Atlanta fed president Raphael Bostic noted the lack of "urgency" to reduce US interest rates, considering the current strength of the economy. However, markets still anticipate a roughly 75% chance of a fed funds rate cut by March. Investors are now awaiting the fed-preferred core PCE price index for further direction.