China kept benchmark lending rates unchanged at its monthly fixing on Wednesday, matching expectations, as new signs of economic stabilization reduced the need for immediate monetary easing.
Recent economic data (Industrial production and consumption indicators) suggests that the world’s second-largest economy has begun to recover from a sharp slowdown, and the yuan’s depreciation has reduced the need for aggressive interest rate cuts.
The one-year loan prime rate (LPR) was kept at 3.45%, while the five-year rate was kept at 4.20%.
Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate affects the pricing of mortgages.