China holds lending benchmarks steady as recovery remains on track

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The view of People's Bank of China headquarters. /CFP

China kept its benchmark lending rates unchanged for the eighth consecutive month in April on Thursday as economic recovery remained on track, with market observers saying there is a reduced need for any immediate monetary support.

The one-year loan prime rate (LPR), a market-based benchmark lending rate, was kept at 3.65 percent, while the over-five-year LPR, on which many lenders base their mortgage rates, was also unchanged at 4.3 percent, according to the People's Bank of China.

The world's second-largest economy grew at a faster-than-expected pace in the first quarter, as businesses and consumers recover from crippling COVID-19 pandemic disruptions.

"The upbeat first-quarter economic data sent signs of strong recovery, which reduces the urgency for authorities to ease monetary policy to aid recovery," Bruce Pang, chief economist and head of research, JLL Greater China, told CGTN on Thursday.

Pang said this was the main reason China's authorities have kept lending benchmarks unchanged.

Traders and analysts said the steady LPRs also came after the central bank bolstered liquidity support for the economy as it rolled over maturing medium-term policy loans with higher cash offerings for the fifth month on Monday while keeping the interest rate unchanged.

The interest rate on medium-term lending facility (MLF) loans serves as a guide to the LPR.

"We expect no cut on one-year MLF or one-year LPR in the near term, as China is still in a recovery phase and the U.S. Federal Reserve still hasn't yet ended its interest rate hiking cycle," said Lin Li, head of global markets research for Asia at MUFG Bank.

(With input from Reuters)

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14:54, 13-Apr-2025