China held its benchmark lending rate steady on Wednesday, though analysts believe the widely expected decision signals just a brief pause in the central bank’s efforts to support an economy ravaged by the coronavirus pandemic, reported Reuters.
The one-year loan prime rate (LPR) remained at 3.85% from last month’s fixing, while the five-year was also kept at 4.65%. A Reuters survey of traders and analysts showed more than 70% of them expected China would stand pat on the benchmark lending rate in May.
Jacqueline Rong, senior China economist at BNP Paribas in Beijing, said the steady LPR does not mean the PBOC won’t deliver additional rate cuts or reduce banks’ reserve requirement ratio (RRR) in June.
“Objectively speaking, economic recovery in April and May was much better than market forecasts, and was probably beyond policy expectations,” she said.