China keeps key lending rates unchanged

China stood pat on its benchmark lending rates for corporate and household loans, as expected, on Monday, with global central banks' rate increases making it tough for Beijing to stimulate a weak domestic economy by lowering rates.

Markets widely believe that Chinese policymakers are wary of risks that the yuan will depreciate and capital outflows will be triggered if they embark on further monetary easing to underpin a Covid-19-hit economy at a time when other major economies are tightening their rates policies.

Central banks across Europe raised interest rates last week, some by a level that shocked markets, in the wake of the Fed's 75 basis point hike to combat high inflation.