China keeps benchmark lending rates unchanged for 16th month in September

Business Recorder reported that China left its benchmark lending rates unchanged for a 16th consecutive month on Sunday, matching market expectations. The one-year loan prime rate stayed at 3.00 per cent, while the five-year rate held at 3.50 per cent. Reuters polled 21 market participants, and every one of them expected both rates to stay put.

The steady rates point to limited room for fresh easing after several major central banks recently took a more hawkish line, even as the yuan kept strengthening. The US Federal Reserve raised rates last week and flagged more increases ahead, and the yield premium on 10-year Treasuries over Chinese government bonds hovered close to a record. Central bank Governor Pan Gongsheng said weaker loan growth is becoming the norm, as contraction in real estate and local government activity reduces credit demand more quickly than emerging sectors can make up for it.