China is set to leave its benchmark lending rates unchanged for a seventeenth consecutive month on Tuesday, according to a Reuters survey of 22 market participants published on Monday, in which every respondent expected the one-year loan prime rate to stay at 3.00 percent and the five-year rate at 3.50 percent. CME Econoday’s pre-announcement consensus shows the same levels with a zero basis point expected change on both tenors.
The unanimity follows Monday’s third quarter growth print, which came in at 4.5 percent from a year earlier, ahead of the 4.4 percent consensus, as surging exports offset weak domestic demand. Market participants told Reuters they expect Beijing to reach its 2026 growth target of 4.5 to 5.0 percent without additional stimulus, helped by a strong start to the year and recent modest fiscal and monetary support, which lessens the case for a rate cut now.
The hold is a choice, not an absence of pressure. China’s new home prices fell again in September, extending a slump of more than three years, and long-dated Chinese bond yields hovered near a 15-month low, Reuters reported. The loan prime rate is calculated monthly from submissions by 20 designated commercial banks to the People’s Bank of China and is charged to banks’ most creditworthy clients, with the five-year tenor the reference for mortgages.
Attention turns to a financial forum in Beijing on Monday afternoon, where People’s Bank of China Governor Pan Gongsheng is due to speak, for any signal on whether the easing bias survives into the final quarter or whether targeted tools remain the whole of the policy response.