SHANGHAI/ SINGAPORE: China left its lending benchmarks unchanged on Thursday, after the central bank stood pat on a key policy rate earlier this week even as signs of a faltering economic recovery called for more stimulus.
China’s economy grew at a frail pace in the second quarter, raising investor hopes for more supportive measures to ensure Beijing’s growth target for the year remains on track.
However, many market watchers said the stimulus could be targeted and limited in scale as any more rate cuts could widen the interest rate differentials with the United States further and pressure an already weak yuan.
The one-year loan prime rate (LPR) was kept at 3.55%, while the five-year LPR was unchanged at 4.20%. In a poll of 26 market watchers conducted this week, all participants predicted no change to either of the two rates.
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