China is expected to leave benchmark interest rates unchanged on Monday, a Reuters poll showed, as encouraging first-quarter economic data reduced the urgency for further monetary stimulus to support a fragile recovery.
The weakening of the yuan also continues to limit the room for maneuver available to Beijing to ease monetary policy.
The prime lending rate (LPR), typically charged to banks’ top customers, is calculated each month after 20 designated commercial banks submit proposed rates to the People’s Bank of China (PBOC).
In a survey of 30 market watchers conducted this week, all respondents expected both the one-year and five-year LPR to remain unchanged.
Most new and outstanding loans in the world’s second largest economy are based on the one-year LPR, which is 3.45%.
The five-year LPR, which serves as the benchmark rate for mortgages, is currently at 3.95%, following a 25 basis point cut in February to support the housing market.
“Currently, with stronger-than-expected growth in the first quarter, we believe authorities may be reluctant to implement further supportive macroeconomic policies,” said Wang Tao, chief China economist at UBS.
Source: Terra
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