China Keeps Loan Prime Rate Unchanged As Stimulus Measures Continue

The People’s Bank of China kept its benchmark loan prime rate (LPR) unchanged on Monday as widely expected, even as Beijing continued to roll out other stimulus measures to support the economy.

The PBOC left its one-year LPR at 3.45%, while the five-year rate, which is used to determine mortgage rates, was left at 3.95%.

The move was widely expected after the PBOC left another medium-term facility rate unchanged last week.

Both rates were kept at record lows, as Beijing sought to shore up economic growth by keeping local monetary conditions as loose as possible.The PBOC cut the 5-year LPR in February to help support the property market, with more measures also coming over the past two weeks.

The LPR is determined by the PBOC based on considerations from 18 designated commercial banks, and is used as a benchmark for lending rates in the country.

Fears of more weakness in the Chinese yuan also limited expectations for any more cuts in lending rates. Beijing has been struggling to maintain a balance between doling out more monetary stimulus and preventing further weakness in the Chinese currency.

But the government rolled out a string of hotly-anticipated stimulus and policy measures over the past two weeks. A bulk of these were aimed at the property market, with China loosening home buying restrictions across several major cities. Local media reports also said that Beijing will encourage state governments to begin buying up some houses from the open market.

These measures came as China also began a massive 1 trillion yuan ($138 billion) bond issuance, which is aimed at sprucing up infrastructure spending.

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