China keeps benchmark loan rate unchanged despite coronavirus

China kept its benchmark lending rate steady today, defying expectations for a reduction to ease borrowing costs in an economy jolted by widespread disruptions to businesses from the coronavirus pandemic, reported the South China Morning Post.

The one-year loan prime rate (LPR) was left unchanged at 4.05% from the previous monthly fixing, while the five-year LPR remained at 4.75%.

A total of 40 respondents, or 71.4% of all participants, in a Reuters survey had expected a reduction in the LPR, with 36 predicting either a five basis point or 10 basis point cut in the one-year rate and no change to the five-year rate.

 “The lack of any cut this month means that the LPR is still only 10 basis points lower than it was at the end of last year, following a small cut in February,” said Julian Evans-Pritchard, senior China economist from Capital Economics. “This clearly won’t be enough to revive demand in the current environment.”