China left benchmark lending rates unchanged at a monthly fixing on Wednesday, in line with market expectations. The one-year loan prime rate (LPR) was kept at 3.45%, while the five-year LPR was unchanged at 3.95%.
China needs to revive a battered property sector. Most new and outstanding loans in China are based on the one-year loan prime rate (LPR), while the five-year rate influences the pricing of mortgages.
But any sharp cuts to interest rates may put pressure on the yuan and banks whose net interest margins (NIMs) have been falling since last year.
