China keeps benchmark lending rates unchanged for 9th month

China kept its benchmark lending rate unchanged for the ninth consecutive month in May, according to the National Interbank Funding Center on Monday.

The one-year loan prime rate (LPR), which influences most new and outstanding loans in China, came in at 3.65 percent. The over-five-year LPR, on which many lenders base their mortgage rates, stood at 4.3 percent.

"The steady LPR fixings are in line with market expectations in view of the unchanged MLF (medium-term lending) rate," Bruce Pang, chief economist and head of research at JLL Greater China, told CGTN.

The MLF rate serves as a guide to the LPR and markets mostly use the medium-term rate as a precursor to any changes to the lending benchmarks.

China's central bank rolled over maturing medium-term lending facility (MLF) loans while keeping the interest rate unchanged last week.

"We do not expect policymakers to unleash major stimulus as the 5-percent-GDP-growth target is still well within reach and issues such as property risks and youth unemployment require a more targeted approach," economists at Goldman Sachs said in a note.

Economists at Capital Economics said the People's Bank of China, the country's central bank, may use other tools such as reserve requirement ratio (RRR) cuts and liquidity injections to guide funding costs lower.

(With input from Reuters)

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