China on Monday left its preferential rates unchanged for the seventh consecutive month in December, “in line with market expectations”.
December’s LPR setting suggests authorities are in no rush to adopt further monetary easing measures as the world’s second-largest economy appears to be on track to meet Beijing’s growth target for this year.
Additionally, the central bank’s adoption of “intercyclical” adjustments aimed at softening the impact of economic cycles and record bank profit margins could give authorities room to delay stimulus measures until next year, some market observers said.
The one-year LPR was maintained at 3.00%, while the five-year LPR remained unchanged at 3.50%.
In a Reuters poll of 25 market participants last week, all expected both rates to remain unchanged.
At this month’s annual Central Economic Work Conference, Chinese leaders pledged to maintain a “proactive” fiscal policy next year that will boost both consumption and investment to maintain high economic growth, which analysts expect Beijing to aim for around 5%.
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