China Leaves Lending Rates Unchanged
(RTTNews) - China's central bank held its benchmark lending rates steady, as widely expected, on Wednesday despite the tightening stance adopted by its global peers.
The People's Bank of China kept the five-year loan prime rate, or LPR, the benchmark for mortgage rates, unchanged at 4.45 percent.
The rate was lowered by a record 15 basis points in May and by five basis points in January.
The one-year LPR was also left unchanged at 3.70 percent. The previous change in the rate was a five basis point cut in January.
The LPR is fixed monthly based on the submission of 18 banks, though Beijing has influence over the rate-setting. This lending rate replaced the central bank's traditional benchmark lending rate in August 2019.
Last week, the PBoC had retained the one-year medium-term lending facility rate at 2.85 percent and the seven-day reverse repurchase agreement rate at 2.1 percent. The central bank had injected liquidity of CNY 100 billion via one-year MLF and CNY 3 billion through seven-day reverse repo operations.
Official data showed that the economy grew only 0.4 percent in the second quarter, casting doubt over Beijing's ability to achieve its full year growth target of around 5.5 percent. Nonetheless, economic activity started to improve in June after the easing of the pandemic related restrictions.
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