China Keeps Benchmark Lending Rates Steady
China’s benchmark lending rates were kept unchanged, official data showed on Monday, in line with market expectations after key policy rates were held steady amid signs of economic recovery. There have been growing concerns over the Chinese economy. Recently, both the US and China were urged to reduce ramping up debt to save the global economy from experience another crisis.
According to information from the authority, the one-year loan prime rate was kept at 3.45%, while the five-year rate was left at 3.95%, said the People’s Bank of China.
The hold on LPR was widely expected after the PBOC left its medium-term lending facility rate unchanged last week. The MLF rate is used as a guide for LPR, which is set by 20 major banks in China.
China reported better-than-expected economic growth in the first quarter of the year, with gross domestic product rising 5.3% from a year earlier. Beijing has set an around 5.0% growth target for this year.
Stronger economic momentum makes any imminent easing less likely, despite some economists still seeing scope for more interest-rate cuts to aid the slumping real-estate sector.
Another consideration is the yuan, which like other Asian currencies, has been under great depreciation pressure amid a strengthening U.S. dollar. China’s central bank reiterated its commitment to a stable currency last week, saying it is steadfast in its aim of keeping the yuan steady at a reasonable and balanced level.
