In November, China kept its benchmark interest rates unchanged for the sixth consecutive month, indicating a careful monetary policy stance in the face of early signs of economic softening. The one-year Loan Prime Rate (LPR) held at 3.0% and the five-year LPR at 3.5% – the same rates expected by both Chinese and international economists and the same rates anticipated by a recent Reuters poll of 23 analysts. The PBOC’s decision shows diminishing urgency to ease further, which follows a recently agreed trade truce with the U.S. At a recent meeting, U.S. President Donald Trump and Chinese President Xi Jinping agreed to roll-back some tariffs in exchange for measures to help combat fentanyl trafficking, some changes in agricultural import policies and a shared commitment to supply renewable energy products (rare earths) to China – good news given recent uncertainty that reduces near-term external vulnerabilities. At the same time, multiple domestic indicators in China continued to soften. In October, China reported declines in exports, slower retail sales, and a sudden decline in new bank loans as enterprises and households hesitated to borrow amid uncertainty. Most economists anticipate that Q4 will prove difficult. Goldman Sachs economist Xinquan Chen commented that he thought the PBOC signals it is willing to accept weaker loan growth at this time, and has pushed broader expectations for monetary easing measures (including a rate cut and RRR reduction) out to early 2026. Overall, China’s unchanged rates signals a complex balancing act between stabilizing economic trends while at the same time preparing for another potentially challenging environment.