China left its benchmark lending rate for corporate and household loans unchanged for a seventh straight month at its November fixing on Friday, matching market expectations, reported the South China Morning Post.
The one-year loan prime rate (LPR) was kept unchanged at 3.85%, while the five-year LPR remained at 4.65%.
The rate decision came after the People’s Bank of China (PBOC) kept borrowing costs on the medium-term lending facility (MLF) unchanged for a seventh straight month this week. MLF, one of the PBOC’s main tools in managing longer-term liquidity in the banking system, serves as a guide for the LPR.
“The inaction did not come as a surprise since the PBOC had not adjusted the rate on its medium-term lending facility (MLF) this month as it did ahead of the past three LPR moves. This would have been the most straightforward way for the PBOC to influence the LPR, which is set as a spread above the MLF rate,” said Julian Evans-Pritchard, senior China economist at Capital Economics.