China unexpectedly leaves lending benchmark LPR unchanged By Reuters

SHANGHAI (Reuters) – China unexpectedly left benchmark lending rates unchanged at the monthly fixing on Friday, despite the Federal Reserve delivering an outsized interest rate cut earlier this week.

The one-year loan prime rate (LPR) was kept at 3.35%, while the five-year LPR was unchanged at 3.85%.

In a Reuters survey of 39 market participants conducted this week, 27, or 69%, of all respondents expected both rates to be trimmed.

Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

China surprised markets by cutting major short and long-term interest rates in July, its first such broad move in almost a year, signalling policymakers’ intent to strengthen economic growth.