China Keeps Lending Rates Unchanged As Expected
(RTTNews) - The People's Bank of China left its benchmark rates unchanged on Friday, as widely expected, after the economic growth exceeded expectations leaving the economy back on the track to achieve the target.
The Chinese central bank maintained its one-year loan prime rate, or LPR, at 3.45 percent. Likewise, the five-year LPR, the benchmark for mortgage rates, was left unchanged at 4.20 percent.
The one-year LPR was last reduced by 10 basis points in August and the five-year LPR was cut by similar 10 basis points in June.
Although Beijing has influence over the LPR, the central bank fixes it monthly based on the submission of 18 banks. The LPR replaced the traditional benchmark lending rate in August 2019.
The decision was in line with expectations as the rate on medium-term lending facility, which acts as a guide to loan prime rates, was left unchanged at 2.5 percent despite raising the liquidity support early this week.
Data released earlier this week showed that the Chinese economy registered an annual growth of 4.9 percent in the third quarter. However, the growth rate weakened from the 6.3 percent logged in the second quarter, which was largely due to the low base of comparison.
Last week, the International Monetary Fund downgraded the China growth outlook citing the lower investment in the country amid the property sector crisis. The economy is projected to expand 5.0 percent this year and 4.2 percent next year.
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