Key facts
- All surveyed market participants predict no change to LPRs.
- One-year LPR expected to remain at 3.00%.
- Five-year LPR expected to remain at 3.50%.
China is poised to maintain its benchmark lending rates unchanged for the 17th month in October, according to a Reuters survey. This decision is anticipated following stronger-than-expected third-quarter GDP figures, which have diminished the likelihood of imminent monetary easing. The loan prime rate (LPR), typically applied to the most creditworthy clients, is determined monthly based on proposals from 20 designated commercial banks to the People's Bank of China (PBOC). All 22 market participants surveyed predicted that both the one-year and five-year LPRs would hold steady at 3.00% and 3.50%, respectively, at the upcoming review on Tuesday. While China's economic growth improved in the third quarter, driven by robust exports that counteracted subdued consumer spending, analysts express concern over structural imbalances due to increasing reliance on external demand. Market participants foresee Beijing achieving its 2026 growth target of 4.5%-5.0% without additional stimulus, supported by a strong start to the year and recent modest fiscal and monetary measures. The widespread expectation for stable LPR settings contrasts with some major economies moving towards tighter monetary policy to combat inflation, while China's long-dated bond yields remain near a 15-month low. Investors are awaiting clues on China's monetary trajectory from PBOC Governor Pan Gongsheng's speech at a key financial forum in Beijing.