China expected to keep lending rates steady, focus turns to Politburo meet
The loan prime rate (LPR), normally charged to banks' best clients, is calculated each month after 20 designated commercial banks submit proposed rates to the People's Bank of China (PBOC).
In a Reuters survey of 20 market watchers conducted this week, all respondents expected both the one-year and five-year LPRs to remain steady.
Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.
The consensus of no immediate monetary easing comes as data this week showed China's second-quarter gross domestic product (GDP) growth nudged slightly above market expectations, even though weak domestic demand and uncertainty around U.S. tariffs have raised economic risks.
"Although continued downward price pressures and sluggish loan demand present a solid case for further easing, the PBOC may opt to hold off until a more opportune window," said Lynn Song, chief China economist for Greater China at ING.
"We continue to expect one more 10-basis-point rate cut and 50-basis-point reserve requirement ratio (RRR) cut before year-end."
For now, market attention would be squarely on the Politburo meeting later this month, which is likely to shape economic policy for the rest of the year, traders and analysts said.
"With H1 real GDP growth still solid, we do not think policymakers see the immediate need to launch broad-based, significant stimulus in the near-term, including at the July Politburo meeting," analysts at Goldman Sachs said in a note.
"Instead, we expect incremental, targeted easing to help stem the property downturn and mitigate labour market pressures in H2."
China's new home prices declined at the fastest pace in eight months in June from the previous month, official data showed on Tuesday, underscoring the challenges policymakers face in reviving demand even after multiple rounds of support measures.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
23 minutes ago
- Reuters
India's financial crime fighting agency summons Google, Meta executives, sources say
July 19 (Reuters) - India's financial crime fighting agency has summoned executives of tech giants Google (GOOGL.O), opens new tab and Meta (META.O), opens new tab to its headquarters on Monday as it investigates accusations of money laundering on online betting apps, two government sources said. The Enforcement Directorate (ED) is investigating whether the platforms eased the way for promotion and wider reach of betting apps through advertisements, the first source said. A date of July 21 has been set for the appearances at the agency's headquarters in the capital, New Delhi, the source added. A second government source accused Google and Meta of using their platforms to promote illegal activities, despite a government advisory against the advertisement of any form of betting. The agency will investigate Google and Meta over the funds they received from betting apps, the second source added, as well as checking if they were advertising or promoting any other betting platforms. Both sources sought anonymity as they were not authorised to speak to media. Google and Meta did not immediately respond to Reuters' requests for comment. Betting and gambling pose "significant financial and socio-economic risks for consumers, especially youth and children," India's information and broadcasting ministry told television channels and digital media in an advisory, opens new tab in 2022. Promotion of offline or online betting and gambling through advertisements was not advised in the larger public interest, the ministry added. Domestic news agency ANI first reported the news.
Reuters
23 minutes ago
- Reuters
China vows tougher action against smuggling of strategic minerals
SHANGHAI, July 19 (Reuters) - China vowed on Saturday to step up a crackdown and toughen law enforcement against smuggling of strategic minerals seen as vital to national security and critical for development. The remarks by the commerce ministry came a day after the state security ministry accused foreign spy agencies of having tried to "steal" rare earths and pledged to crack down on infiltration and espionage targeting the critical sector. The world's largest supplier of dozens of strategic minerals, China began imposing export curbs in 2023 on supplies vital to sectors ranging from chipmaking and the energy transition to defence. The commerce ministry remarks, describing smuggling and export of strategic minerals as a severe problem to be combated, came at a meeting of officials responsible for export control coordination and other government bodies. "Cases of smuggling by a small number of criminals for their own selfish interests and collusion between domestic and foreign parties are still occurring," it said in a statement. Evasive methods such as false declarations and third-country transshipment were taking on increasingly covert forms, it added, urging government bodies to prevent illegal outflows of strategic minerals and related technologies. China has adopted a "zero-tolerance" approach to smuggling and export of strategic minerals, which it will fight with a heavy hand, through special efforts to toughen law enforcement, the ministry said. In May China said it would strengthen controls on the entire supply chains of strategic mineral exports while tightening its grip on materials deemed crucial to national interest. Earlier, Beijing launched a special campaign to tackle smuggling of strategic minerals such as gallium, germanium, antimony, tungsten and some rare earths.
Reuters
2 hours ago
- Reuters
India summons Google and Meta in betting app case, ANI reports
July 19 (Reuters) - India's Enforcement Directorate agency, which probes economic crimes, has summoned representatives from Google (GOOGL.O), opens new tab and Meta (META.O), opens new tab to appear on Monday in connection with a case involving betting apps, ANI news agency reported on Saturday, citing official sources.
