SHANGHAI/SINGAPORE, April 19 (Reuters) - China is widely
expected to stand pat on lending benchmarks at the monthly
fixing on Thursday, a Reuters survey showed, as economic
recovery has been well on track - as seen from
better-than-expected first-quarter data.
China's economy grew at a faster-than-expected pace in the
first quarter, reducing the urgency for authorities to ease
monetary policy to aid recovery, traders and economists said.
The loan prime rate (LPR), which banks normally charge their
best clients, is calculated each month after 18 designated
commercial banks submit proposed rates to the People's Bank of
China (PBOC).
In a poll of 30 market watchers, 27 predicted no change to
either the one-year LPR or five-year tenor .
The remaining three respondents forecast a marginal 5
basis-point reduction to either the one-year or five-year LPR.
"With the better-than-expected (data) reading in Q1 and the
low base from last year in the coming quarters, the 'around
5.0%' growth target for this year could be a low-hanging fruit,"
Citi analysts said in a client note.
The consensus of steady LPRs also came as the central bank
bolstered liquidity support for the economy as it rolled over
maturing medium-term policy loans with higher cash offerings for
the fifth month on Monday, while keeping the interest rate
unchanged as widely expected.
The interest rate on medium-term lending facility (MLF)
loans serves as a guide to the LPR.
"We expect no cut on one-year MLF or one-year LPR in the
near term, as China is still in a recovery phase and the U.S.
Federal Reserve still hasn't yet ended its interest rate hiking
cycle," said Lin Li, head of global markets research for Asia at
MUFG Bank.
The Fed is widely expected to raise its policy rate once
more in May, while monetary easing in China could further widen
yield differentials between the world's two biggest economies,
hurting the yuan and risking capital outflows.
(Reporting by Steven Bian and Tom Westbrook; Writing by Winni
Zhou; Editing by Christopher Cushing)
Messaging: winni.zhou.thomsonreuters.com@reuters.net))
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