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China retained its benchmark lending rates for the seventh straight month on Monday after a surprise reserve requirement ratio reduction last week.

The People's Bank of China left its one-year loan prime rate, or LPR, unchanged at 3.65 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was maintained at 4.30 percent.

The last change in the LPR was in August 2022, when the five-year rate was cut by 15 basis points and one-year rate by 5 basis points.

The LPR is fixed monthly based on the submission of 18 banks, though Beijing has influence over the rate-setting. The LPR replaced the central bank's traditional benchmark lending rate in August 2019.

Markets anticipated the central bank to hold the LPR today as the medium-term lending facility, or MLF, which acts as a guide to the LPR, was kept unchanged last week.

The PBoC last week added CNY 481 billion liquidity into the financial system via one-year MLF at an unchanged rate of 2.75 percent and injected CNY 104 billion through seven-day reverse repo operations at an interest rate of 2.0 percent.

Last Friday, the PBoC decided to lower the reserve requirement ratio for banks by 25 basis points for the first time this year to support the nascent economic recovery and to ensure reasonable and sufficient liquidity in the banking system.

AUD vs US Dollar (FX:AUDUSD)
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AUD vs US Dollar (FX:AUDUSD)
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