China kept its benchmark lending rates unchanged for the fourth consecutive month in September, in line with market expectations, following the central bank’s decision to hold a main policy rate steady last week, reports Reuters. The steady loan prime rate (LPR) fixings reflect the authorities cautious approach to monetary easing amid easing Sino-U.S. trade tensions, resilient exports and a recent stock market rally, despite signs of a domestic slowdown and monetary easing by the Federal Reserve.
The one-year LPR was kept at 3.0% on Monday, while the five-year LPR was unchanged at 3.5%. In a Reuters survey of 20 market participants conducted last week, all participants predicted no change to either of the two rates despite a recent spate of weak economic data.
China’s central bank left the seven-day reverse repo rate, which now serves as the main policy rate, unchanged last week. Recent data showed factory output and retail sales in August recorded their weakest growth since last year, highlighting economic headwinds and slowdown in the domestic economy.