China is expected to keep its benchmark lending rates unchanged on Monday, according to a Reuters poll, as recent data points to steady economic performance, reducing the urgency for fresh monetary easing.
The one-year and five-year Loan Prime Rates (LPR), used for most loans and mortgages, are set monthly based on submissions from 20 designated banks to the People’s Bank of China (PBOC). All 20 analysts surveyed forecast no change this month.
Despite ongoing concerns over weak domestic demand and tariff-related uncertainties, China's second-quarter GDP slightly outpaced expectations. Economists suggest that while soft loan demand and deflationary pressures support the case for easing, the central bank may wait for a better moment.
ING's Lynn Song expects a small rate cut and a reduction in the reserve requirement ratio later this year. Meanwhile, markets are focused on the upcoming Politburo meeting, where policymakers are expected to prioritize targeted, gradual support rather than large-scale stimulus.
Goldman Sachs analysts anticipate selective easing aimed at stabilizing the property sector and labor market, especially after June home prices saw their sharpest monthly drop in eight months.