China leaves benchmark lending rates unchanged in Dec

SHANGHAI (Reuters) – China left its benchmark lending rates unchanged at the monthly fixing on Friday, matching market expectations, as falling yields, shrinking net interest margins and a weakening yuan create limits for immediate monetary easing.

The one-year loan prime rate (LPR) was kept at 3.10%, while the five-year LPR was unchanged at 3.60%.

In a Reuters poll of 27 market participants conducted this week, all respondents expected both rates to stay unchanged.

Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

Chinese lenders last slashed lending benchmarks in October by bigger-than-expected margins to revive economic activity.