China banks leave key lending rate unchanged, following PBoC
Chinese commercial lenders held benchmark lending rates steady, in line with the country’s central bank decision to leave key policy rates unchanged.
The one-year loan prime rate (LPR) was held at 3.45% matching consensus forecasts, while the five-year rate, used as a reference for mortgages, was also kept at 4.2%.
The LPRs are based on the interest rates that 20 banks offer their best customers. The People’s Bank of China one-year policy rate was kept unchanged at 2.5% last week.
“China is relying on fiscal policy to support growth this year, as it pursues an industrial restructuring strategy towards advanced manufacturing and away from over-reliance on the property sector,” said Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics.
“Still, a lending rate cut to boost private sector confidence is likely in Q1, following a coordinated round of deposit rate cuts by state-owned banks in December. Policymakers have signalled repeatedly that China will not resort to a credit-fuelled mega-stimulus this time.”
Reporting by Frank Prenesti for Sharecast.com