SHANGHAI- China is expected to leave its benchmark lending rates unchanged on Thursday, a Reuters poll showed, as authorities walk a fine line between prioritizing financial stability and providing more stimulus at a time when Beijing is facing fresh trade tensions.
The central bank has adopted a cautious approach in recent cash injection despite a shift to an “appropriately loose” monetary policy stance this year, as yuan weakness and narrowing net profit margins at lenders limit its easing efforts.
The loan prime rate (LPR), normally charged to banks’ best clients, is calculated each month after 20 designated commercial banks submit proposed rates to the People’s Bank of China (PBOC).
In a Reuters survey of 30 market watchers conducted this week, all respondents expected both the one-year and five-year LPRs to remain steady.
China’s central bank said last week that it would adjust its monetary policy at the appropriate time to support the economy, amid rising external headwinds, particularly led by the threat of an escalating trade war with the United States under President Donald Trump.
Trump has announced a 10 percent tariff on Chinese imports as part of a broad plan to improve the US trade balance, triggering retaliation from Beijing.
