The offshore yuan steadied around 7.12 per dollar on Monday, halting two consecutive sessions of losses as investors assessed the PBOC’s key lending rate decision. The central bank held its benchmark loan prime rates unchanged for the fourth straight month at record lows, in line with market expectations, even after the US Federal Reserve cut rates by 25 bps last week. The one-year LPR, which guides most corporate and household loans, remained at 3.0%, while the five-year LPR, a key reference for mortgages, stayed at 3.5%. Both were last cut by 10 bps in May. The hold reflects caution despite weaker activity, with August industrial output growing at the slowest pace in over a year, retail sales posting a nine-month low, and exports rising at the weakest rate since February. Credit demand also lagged as property sector stress and curbs on overcapacity weighed. Still, markets expect modest policy easing later this year as authorities look to keep growth near the government’s 5% target.

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