China unexpectedly leaves benchmark lending rates unchanged after Fed's jumbo cut
Market watchers polled by Reuters had expected a trim as the Federal Reserve's 50 basis point rate cut had given more room for China to lower its domestic borrowing costs without prompting a sharp decline in yuan.
The People's Bank of China (PBOC) said it would keep the one-year loan prime rate (LPR) at 3.35%, as well as the five-year LPR at 3.85%.
The one-year LPR affects corporate and most household loans in China, while the five-year LPR acts as a benchmark for mortgage rates.
The rate cut stateside had allowed more monetary flexibility for China to focus on easing the debt burden on its consumers and businesses as it seeks to bolster investment and spending.
China surprised the markets by shaving major short and long term lending rates in July, in a move to reflate growth in its economy, which was facing a prolonged property crisis and weakened consumer and business sentiment.
In August, China's retail sales, industrial production and urban investment all grew slower than expected, missing expectations among economists polled by Reuters. Urban jobless rate rose to a six-month high, while year-on-year home prices fell at their fastest pace in nine years.
