China leaves lending benchmark steady

    176

    SHANGHAI- China kept its benchmark lending rate for corporate and household loans unchanged for an 11th straight month at its March fixing on Monday, matching market expectations.

    The one-year loan prime rate (LPR) was kept at 3.85 percent. The five-year LPR remained at 4.65 percent.

    Twenty-nine traders and analysts of 30 participants in a Reuters poll last week predicted no change in either rate.

    Most new and outstanding loans in China are based on the one-year LPR. The five-year rate influences the pricing of mortgages.

    Meanwhile, China will step up imports of high-quality foreign goods and services as the economy makes a steady recovery, vice premier Han Zheng said on Sunday.

    The world’s No.2 economy, will strengthen macro policy coordination with other countries, Han told the China Development Forum, a high-level business gathering hosted by the Development Research Centre of the State Council.

    “Since the start of this year, China’s economic operations have continued a steady recovery trend,” Han said.

    “We will adjust and improve import tax policies, increase imports of high-quality products and imports of services,” he said without giving further details.

    China’s economy expanded 2.3 percent last year, making it the only major economy to report growth, although the growth was its weakest in 44 years.

    Its economy is widely predicted to expand by more than 8 percent in 2021, led by an expected double-digit rise in the first quarter, but analysts and officials say the recovery remains uneven.

    Also at the forum, He Lifeng, head of the National Development and Reform Commission, the state planner, said the foundation of China’s economic recovery was not solid, citing global economic uncertainties and domestic economic imbalances.

    He said China would continue to provide financial relief for some companies and avoid an abrupt change in policy.

    The central bank is trying to cool credit growth to help contain debt risks, but is treading warily to avoid hurting the economic recovery, which remains uneven as consumption lags and small firms struggle, policy insiders said.