HONG KONG -- The decision by China's central bank to keep a key mortgage lending rate unchanged highlights the challenge facing Beijing: how to stimulate the economy while also protecting bank profits?
The People's Bank of China surprised markets by keeping the five-year loan prime rate at 4.2% on Monday and only cutting the one-year rate by 10 basis points to 3.45%. Markets had expected a cut to the former and a bigger reduction in the latter.
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