The People’s Bank of China left its one-year loan prime rate at 3.0% and the five-year at 3.5% today, extending a steady policy stance for the fourth month running. The unchanged setting came in line with forecasts and follows the central bank’s last 10bps trim in May, part of earlier efforts to shore up growth.
Policymakers opted for patience as the recent strong rally in domestic equities reduced pressure for immediate support, even as official data continue to point to uneven demand and fading momentum in industry and property.
Still, most expect modest easing steps before year-end as Beijing works to lock in its 5% growth target, also as policy focus shifted from deflation management to reflation
