China keeps key lending rates steady
By Frank Prenesti
Date: Thursday 20 Apr 2023
(Sharecast News) - China held key lending rates steady as expected on Thursday, with its one-year Loan Prime Rate (LPR) left at 3.65%, while the five-year LPR, used to determine mortgage rates, maintained at 4.30%.
The LPR is decided by the central bank based on considerations taken from 18 designated commercial banks, and is in turn used as a benchmark by private banks in offering loans.
"The economy is picking up after the removal of zero-Covid policy, despite some worries over the stamina of the rebound. Q1 economic data beat expectations, led by the services sector. Consumption is building momentum and home sales are rebounding, especially in upper-tier cities," said analysts at Pantheon Macroeconomics.
"Questions remain over the longevity of the domestic demand rebound in China, and how much it is driven by the release of pent-up demand."
"Policymakers will be monitoring two areas in particular: how much the labour market strengthens on the back of accelerating GDP growth, and sluggish private sector investment, by contrast with 10% y/y state sector investment growth in Q1."
Reporting by Frank Prenesti for Sharecast.com
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