China is expected to keep its benchmark lending rate unchanged tomorrow (November 20), according to analysts polled by Reuters.
Analysts said the main reason was that the rate cut a month ago has reduced banks’ profits.
China has recently announced a series of economic stimulus measures. Since late September, China has loosened monetary policy as well as fiscal measures and supported the real estate market, aiming to lift the economy out of deflation and back to the government’s growth target.
In October, Chinese lenders cut lending standards by a larger amount than expected to revive economic activity.
Analysts expect the one-year and five-year LPR to remain unchanged.
The loan prime rate (LPR), which is typically charged to a bank’s best customers, is calculated monthly after 20 designated commercial banks submit their proposed rates to the People’s Bank of China (PBOC).
“The LPR has been cut sharply in October, so it is unlikely that there will be another cut this month,” said a trader at a Chinese bank.
Earlier, on October 21, the People’s Bank of China (PBOC) adjusted its benchmark five-year lending rate, cutting it from 3.85% to 3.6%.
