China Keeps Loan Prime Rates Unchanged
(RTTNews) - China kept its main lending rates unchanged for the second straight month as the yuan's weakness limited the scope for policy loosening.
The People's Bank of China retained its one-year loan prime rate, or LPR, at 3.65 percent. Likewise, the five-year LPR, the benchmark for mortgage rates, was kept unchanged at 4.30 percent.
Previously, the bank had reduced the five-year LPR rate by 15 basis points each in August and May and by 5 basis points in January.
The LPR is fixed monthly based on the submission of 18 banks, though Beijing has influence over the rate-setting. The LPR replaced the central bank's traditional benchmark lending rate in August 2019.
Markets widely expected the bank to maintain the LPR on Thursday after the medium-term lending facility, which acts as a guide to the LPR, was kept unchanged at 2.75 percent on October 17.
The PBoC had conducted one-year MLF on Monday, to inject CNY 500 billion into the financial system.
Early this week, China delayed the publication of its third quarter GDP data without providing any explanation for the postponement as the release coincided with the 20th party conference of the ruling Communist Party.
The economy was expected to expand at a faster pace of 3.4 percent in the third quarter. Nonetheless, the expected growth is well below Beijing's growth target of 'around 5.5 percent' for the whole year.
The International Monetary Fund last week projected China's economy to grow 3.2 percent this year, and slashed the forecast for next year to 4.4 percent.
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