China’s five-month lending rates remain unchanged

SHANGHAI (Reuters) – China left its five-month lending rate unchanged on Friday, as expected, but analysts said it could be cut in the future as the central bank pledged to support the economy. of the COVID.

The one-year lending rate (LPR) – on which most new loans and repayments are based – remained at 3.65%. The five-year LPR, considered a mortgage rate, was held at 4.30%. China last cut LPR in August. The setting of the January LPR is in line with the results of a Reuters survey conducted this week, in which almost two-thirds of the respondents predicted no change in the LPRs. With the New Year holiday approaching, the decision of the People’s Bank of China (PBOC) to leave its policy rate unchanged this month, and a new mortgage policy, said the examine the reasons for not doing so. But, researchers are hoping for more satisfaction ahead. Capital Economics expects the rate to decrease next month.

China’s economy grew by just 3% in 2022, below official expectations, but the government’s sudden decision on its no-COVID policy has raised hopes of a resumption. strong. However, the three years of zero-COVID may have left scars that may hinder the recovery of consumption in the future, Goldman Sachs said in a report on Thursday. The publication of January LPRs came on the last working day in China before the Spring Festival holiday week. It also comes after China this month introduced a new regulatory framework on mortgage rates for first-time home buyers. According to the researchers, the policy change will reduce the urgency to reduce the five-year LPR. The LPRs are calculated monthly after the 18 commercial banks submit information to the National Interbank Funding Center, an organization of the PBOC.

(Reporting by Shanghai newsroom; Editing by Jacqueline Wong)

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