China is likely to leave benchmark lending rates unchanged for fourth straight month

According to a Reuters poll, China is projected to leave its benchmark lending rates (LPR) unchanged for the third straight month on Tuesday. However, respondents raised their expectations for further central bank easing.

Last week, officials vowed to prop up China’s economy as it was struggling with rising COVID-19 cases amid loosening of measures. As a result, there have been rumors that Beijing will loosen policy.

In a Reuters poll of 27 market watchers conducted recently, 17 (63%) of all participants expected both one-year and five-year LPR to remain unchanged. The loan prime rate (LPR) is considered the interest rate that banks charge their most creditworthy customers.

10 respondents anticipate monetary easing this month. Eight market watchers expect a reduction to the five-year LPR, while two other participants believe the bank will deliver reductions to both rates.