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PBOC keeps LPR's lending index unchanged in October

A pedestrian walks past People's Bank of China (PBOC) headquarters on August 6, 2019 in Beijing, China.

Xu Jinbai | Visual China Group | Getty Images

On Monday, China unexpectedly kept its new reference lending rate unchanged for the first time since its debut in August, suggesting that Beijing is keen to avoid over-releasing monetary policy for fear that it may drive up already high debt levels across the economy .

The one-year loan price (LPR Prime) (LPR) remained at 4.20%, steady from the previous month's fix. The five-year LPR was set at 4.85%, unchanged from September.

A Reuters survey last week had predicted that interest rates would be lowered again after reductions in August and last month.

It is the third determination since the People's Bank of China (PBOC) unveiled the new lending benchmark, set by 1

8 banks.

The new LPR is linked to the interest rate on the PBOC's Medium-Term Lending Facility (MLF), which is determined by a broader demand for the central bank's liquidity financial system. The one-year MLF rate, last lowered in February 2016, now amounts to 3.3%.

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