China kept its benchmark lending rates unchanged for the third straight month on Monday, as a weaker yuan and persistent capital outflows continued to limit Beijing’s ability to ease monetary conditions to support the economy, reports Reuters. But sluggish credit demand and a darkening growth outlook have prompted some traders and market analysts to predict a marginal reduction to the mortgage reference rate as early as next month to prop up the broader economy.
As expected, the one-year loan prime rate (LPR) was kept at 3.65%, while the five-year LPR was unchanged at 4.30%.
In a Reuters poll of 22 market watchers conducted last week, all respondents predicted no change to the one-year LPR. However, five participants expected a reduction to the five-year LPR.