In a move signaling cautious monetary policy, the People’s Bank of China (PBOC) opted to maintain its key interest rate unchanged on Thursday, despite the U.S. Federal Reserve’s decision to cut rates earlier the same day. The PBOC injected 487 billion yuan ($68.56 billion) through seven-day reverse repos, keeping the rate steady at 1.40%. This decision comes amid resilient export performance and a significant stock market rally, which have provided policymakers with the flexibility to withhold additional stimulus measures. Analysts suggest that while China’s economy is experiencing a slowdown, the deceleration is less severe than anticipated. Goldman Sachs’ chief China economist, Hui Shan, noted that the resilience in exports is likely to persist, and the government may be deferring some planned policy support to next year. Despite recent economic data indicating challenges, experts like Nomura’s Ting Lu believe that major stimulus could risk inflating a stock bubble. However, a modest rate cut of 10 basis points may be considered in the coming weeks if market conditions warrant. China’s stock market has been performing strongly, with the Shanghai Composite Index nearing its 10-year highs. Some analysts anticipate potential monetary easing measures later this year to ensure the economy remains on track to meet its annual growth target of ‘around 5%.’ ANZ’s senior China strategist, Xing Zhaopeng, highlighted that while growth is slowing, it is not yet sufficient to undermine the annual target. The focus remains on long-term structural reforms and the upcoming Fourth Plenum in October, where policy priorities may shift back to short-term growth.