UPDATE 1-China leaves lending benchmark LPR unchanged, as expected
(Adds details, comments)
SHANGHAI, Aug 20 (Reuters) – China left its benchmark lending rate for corporate and household loans unchanged for a 16th straight month at its August fixing on Friday, as widely expected.
The one-year loan prime rate (LPR) was kept at 3.85%. The five-year LPR remained at 4.65%. The rate was unchanged for the 16th straight month.
Twenty-five traders and analysts, or 78% of 32 participants in a snap poll, had predicted no change in either tenor, while the remaining seven respondents all expected a cut to the one-year LPR.
The People’s Bank of China (PBOC) injected billions of yuan through medium-term loans into the financial system earlier this week, which many market participants interpreted as an effort to prop up activity, although the cost of such borrowing was left unchanged.
The interest rate of the MLF, which serves as a guide for the LPR, has been unchanged for 16 straight months, which has led to a steady LPR, they said.
“If the MLF rate remains unchanged, it’s hard for the LPR to move by itself,” said a trader at a Chinese bank.
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