Economists polled by Reuters expect China's central bank to leave benchmark lending rates unchanged tomorrow after unexpectedly cutting them in July.
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 Central Bank.
According to economists' forecasts, the one-year LPR remains at 3.35%, and the five-year LPR will be maintained at 3.85%.
Previously published official data showed that the net interest margin of commercial banks - a key indicator of profitability - fell to a record low of 1.54% at the end of March. Meanwhile, bank lending declined more than expected in July, reaching its lowest level in almost 15 years, driven by sluggish demand for loans and seasonal factors, as well as increased expectations that the central bank may take additional steps to ease monetary policy.
At the same time, traders and analysts said that the sequence of rate cuts in July showed that the monetary framework of the Central Bank has changed, shifting the short-term rate to being the main signal guiding markets. The LPRs used to be loosely pegged off the one-year medium-term lending facility (MLF) and market participants typically saw changes in the MLF rate as a precursor to changes in the lending benchmark gauge.