China's central bank decided to keep the one-year loan prime rate, or LPR, at 3 percent and the five-year LPR at 3.5 percent at today's meeting, marking the 15th consecutive month of unchanged rates and matching market expectations. Analysts view the rate hold as a sign that Chinese policymakers may rely more on accelerating fiscal spending than on a new round of monetary easing to support economic growth, while Chinese commercial banks still face narrowing margins near record lows. The central bank said last week that it would maintain appropriately accommodative monetary policy and take effective measures as needed, but it has not given a clear signal about cutting policy rates or reducing banks' reserve requirement ratios, even though July data pointed to economic weakness from sluggish domestic demand, including industrial output, retail sales, and loan growth.
PBOC holds LPR steady, no easing signal, supporting yuan stability
