China held its benchmark lending rate steady on Wednesday, though analysts believe the widely expected decision signals just a brief pause in the central bank’s efforts to support an economy ravaged by the coronavirus pandemic.
A Reuters survey of traders and analysts showed more than 70% of them expected China would stand pat on the benchmark lending rate in May.
Markets usually take the People’s Bank of China’s (PBOC) stance on its medium-term lending facility (MLF) rate - which serves as a guide for the LPR - as an indicator for any adjustment to the lending benchmark.
The PBOC surprised markets last Friday by keeping the interest rate on MLF loans steady, even as authorities have stepped up the pace of monetary easing recently to combat the worst economic slowdown in decades.
Jacqueline Rong, senior China economist at BNP Paribas in Beijing, said the steady LPR does not mean the PBOC won’t deliver additional rate cuts or reduce banks’ reserve requirement ratio (RRR) in June.
“Objectively speaking, economic recovery in April and May was much better than market forecasts, and was probably beyond policy expectations,” she said.
Gross domestic product (GDP) shrank 6.8% in the first quarter year-on-year, the worst quarterly contraction on record, as the pandemic and tough containment measures paralyzed activity across the country.
China has lowered the LPR twice this year, while also delivering other easing measures to restore growth.
Some analysts expect more aggressive monetary and fiscal stimulus could be rolled out soon to help companies and consumers, possibly at China’s annual National People’s Congress (NPC) session starting on May 22.
The Insight Partners is a one stop industry research provider of actionable intelligence. We help our clients in getting solutions to their research requirements through our syndicated and consulting research services. We specialize in industries such as Semiconductor and Electronics, Aerospace and Defense, Automotive and Transportation, Biotechnology, Healthcare IT, Manufacturing and Construction, Medical Device, Technology, Media and Telecommunications, Chemicals and Materials.
Severity: Warning
Message: count(): Parameter must be an array or an object that implements Countable
Filename: amp/news_details_amp.php
Line Number: 252
Backtrace:
File: /home/smartmarketnews/public_html/application/views/amp/news_details_amp.php
Line: 252
Function: _error_handler
File: /home/smartmarketnews/public_html/application/controllers/Amp_controller.php
Line: 41
Function: view
File: /home/smartmarketnews/public_html/index.php
Line: 315
Function: require_once
Smarter Decisions with Smart News
Smart Market News is committed to getting its readers the latest updates and insights on industries that help in making “smarter” business decisions. With insights and inputs from corporate decision makers, we bring you the stories of adopting innovative solutions and strategies that have been changing the world. Our editorial insights on products, solutions, companies, and adoption of best practices not only help in understanding the markets better, but also prove to be a complete package for your information needs.
media@smartmarketnews.com | sales@smartmarketnews.com
Contact Us