SHANGHAI (Reuters) -China is expected to leave benchmark lending rates unchanged for the fourth month in a row next Monday, a Reuters survey showed, after the central bank kept a key policy rate steady following the U.S. Federal Reserve’s rate cut.<\/p>\n
Despite a string of recent data suggesting the Chinese economy is losing momentum, authorities appear to be not in a rush to roll out major stimulus measures amid resilient exports and a recent stock market rally, market watchers said.<\/p>\n
The loan prime rate (LPR), normally charged to banks’ best clients, is calculated each month after 20 designated commercial banks submit propose rates to the People’s Bank of China (PBOC).<\/p>\n
In a Reuters survey of 20 market watchers this week, all respondents expected both the one-year and five-year LPRs to remain steady on Monday at 3.00% and 3.5%, respectively.<\/p>\n
“The LPRs won’t be adjusted given any changes should follow reductions in the policy rate,” said a trader at a brokerage, referring to the seven-day reverse repo rate that now serves as the main policy rate.<\/p>\n
China’s central bank left the seven-day reverse repo rate unchanged on Thursday, following the Fed’s decision to reduce rates.<\/p>\n
Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. China cut both rates by 10 basis points in May.<\/p>\n
“While the broad-based deterioration in July-August activity data increased the urgency to introduce new stimulus, we remain cautious about the size of any new fiscal stimulus,” analysts at Barclays said in a note, adding chances of fresh fiscal stimulus could be reduced if the trade truce between Washington and Beijing holds.<\/p>\n
Still, some analysts expect marginal monetary easing later this year will ensure the world’s second-largest economy will hit the government’s annual growth target of “around 5%.”<\/p>\n
“The two months of poor data from July and August should convince policymakers to take more action to stabilize the economy,” said Larry Hu, chief China economist at Macquarie.<\/p>\n
“To be sure, these measures should be incremental, as policymakers don’t need major stimulus to reach the 5% GDP target. In our view, they don’t want to miss the target, but they won’t want to overachieve it, either.”<\/p>\n
Hu expects a 10-basis-point rate cut by year-end.<\/p>\n
(Reporting by Shanghai Newsroom; Editing by Kim Coghill)<\/p>\n","protected":false},"excerpt":{"rendered":"SHANGHAI (Reuters) -China is expected to leave benchmark lending rates unchanged for the fourth month in a row…\n","protected":false},"author":2,"featured_media":73410,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[2714,79,381,179,18,36838,19,17,9711,9710,9709,50296],"class_list":{"0":"post-73409","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-bank-of-china","9":"tag-business","10":"tag-china","11":"tag-economy","12":"tag-eire","13":"tag-fiscal-stimulus","14":"tag-ie","15":"tag-ireland","16":"tag-lpr","17":"tag-market-watchers","18":"tag-reuters-survey","19":"tag-unchanged"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/73409","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=73409"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/73409\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/73410"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=73409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=73409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=73409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}