China's commercial lenders kept their benchmark lending rates unchanged on Wednesday, following the central bank's move last week to hold policy rates steady as officials assess the economic impact of existing stimulus.
The one-year loan prime rate was held at 3.45%, according to a statement from the People's Bank of China, in line with the forecasts from most of the economists surveyed by Bloomberg. The five-year rate, a reference for mortgages, was kept steady at 4.2%.
The LPRs are based on the interest rates that 18 banks offer their best customers, and are published by the PBOC monthly. They are quoted as a spread over the central bank's one-year policy rate, or the medium-term lending facility rate, which was kept unchanged last week.
The PBOC may be waiting to gauge the economic effects of previous easing measures, including an interest rate cut in August and a recent reduction in the reserve requirement ratio for banks.
Policymakers are also wary of putting further downward pressure on the yuan ahead of the US Federal Reserve's next rate decision, which is expected later Wednesday.
Chinese banks have seen their profit margins coming under increasing pressure as they heed the government's call to step up support for the economy. The PBOC has been guiding banks to lower the rates on existing mortgages as part of efforts to help the beleaguered property market.
Source : Bloomberg
