China likely to keep rates unchanged on Wed. – poll

China is expected to keep benchmark lending rates unchanged on Wednesday, according to a Reuters survey released on Tuesday.

The loan prime rate (LPR) is calculated monthly based on proposals from 20 commercial banks to the People’s Bank of China (PBOC).

All 27 market watchers surveyed are expecting no change in the one-year and five-year LPRs, the report added.

The one-year LPR, at 3.45 per cent, is the basis for most loans in China. In February, the five-year LPR was reduced to 3.95 per cent to support the property market.

The PBOC’s decision to maintain the medium-term lending facility (MLF) rate last week reflects a focus on currency stability.

Analysts view the MLF rate as a precursor to changes in the LPR. Despite signs of economic improvement, such as strong factory output and retail sales, the property sector remains a concern.

PBOC Governor Pan Gongsheng’s commitment to a stable yuan and potential monetary easing measures has led to expectations of further cuts to the MLF and LPR rates in the near future.

(1 dollar = 7.20 Chinese yuan)