Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China seen keeping lending benchmark steady for 18th straight month

EconomyOct 19, 2021 02:05AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Headquarters of the People's Bank of China (PBOC), the central bank, is pictured in Beijing, China September 28, 2018. REUTERS/Jason Lee

SHANGHAI (Reuters) - China is expected to keep its benchmark lending rate steady for the 18th straight month at its October fixing on Wednesday, despite growing pressure on the economy, a Reuters survey showed.

Nineteen traders and analysts, or 95% of 20 participants, in the snap poll predicted no change in either the one-year Loan Prime Rate (LPR) or the five-year tenor after the People's Bank of China (PBOC) kept the interest rate on its medium-term loans unchanged last week.

The remaining one respondent forecast a marginal cut of 5 basis points to the one-year LPR and expected no change to the five-year tenor, which influences the pricing of mortgages.

The one-year LPR is currently at 3.85%, and the five-year rate is at 4.65%.

China's economy expanded 4.9% in the July-September quarter from a year earlier, data showed on Monday, its weakest pace since the third quarter of 2020.

The world's second-largest economy is grappling with power shortages that have hit factories and debt problems in its property sector.

The strong market expectations for a steady LPR fixing in October came as the PBOC rolled over maturing medium-term loans last Friday and kept their interest rates unchanged.

"The MLF interest rate sets a baseline for commercial bank LPR quotations," economists at Capital Economics said in a note.

"The PBOC has also kept market interbank rates broadly stable recently, giving commercial banks little incentive to lower lending rates of their own accord. All of this points to the LPR being left unchanged this month," they said, but adding an obvious next step would be a cut to the five-year LPR to help to support housing demand.

The interest rate on the medium-term lending facility (MLF) serves as a guide for the LPR, and many traders and analysts say any adjustment to the LPR should mimic changes to the borrowing cost of MLF loans.

Sun Guofeng, head of the central bank's monetary policy department said liquidity in China's banking system would be basically balanced in the fourth quarter, with no big fluctuations, while emphasising that the PBOC would stick to normal monetary policy, which will be flexible, targeted and appropriate.

The LPR is a lending reference rate set monthly by 18 banks.

All 20 responses in the survey were collected from selected participants on a private messaging platform.

China seen keeping lending benchmark steady for 18th straight month
 

Related Articles

Senate confirms Rosenworcel to new term on U.S. FCC
Senate confirms Rosenworcel to new term on U.S. FCC By Reuters - Dec 07, 2021

By David Shepardson WASHINGTON (Reuters) - The U.S. Senate voted 68-31 on Tuesday to confirm Federal Communications Commission chair Jessica Rosenworcel to a new five-year term...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email