China Expected To Hold Lending Rates Steady Again In July

China is expected to leave its benchmark lending rates unchanged in July, marking the 14th consecutive month without a rate adjustment, according to a Reuters survey. The one-year and five-year loan prime rates (LPRs), which influence lending costs for households and businesses, are expected to remain at 3.00% and 3.50%, respectively, when the rates are reviewed on Monday. The LPR, which influences lending rates offered by banks to their most creditworthy customers, is set monthly based on submissions from 20 designated commercial banks to the People’s Bank of China (PBOC). The expected decision comes despite weaker economic data from the second quarter. China’s economy grew at its slowest pace in more than three years during the period, with sluggish domestic consumption offsetting continued strength in exports and manufacturing. While the slowdown has raised expectations for additional policy support, analysts do not expect immediate broad-based monetary easing. Goldman Sachs China economist Xinquan Chen said existing fiscal measures are likely to remain the main focus, while the PBOC continues to maintain liquidity in the banking system. Attention is now turning to upcoming policy discussions, including a Politburo meeting expected to set economic priorities for the second half of the year. Some analysts have suggested a limited rate cut could still be possible as authorities seek to support growth. Citi analysts have forecast the possibility of a small reduction alongside faster implementation of fiscal measures. The LPR review is scheduled for Monday, with markets watching closely for any shift in China’s approach to supporting its economy.