China kept benchmark lending rates unchanged for a fifth month on Friday, as expected, but analysts say future cuts are possible as the central bank has pledged to support the COVID-ravaged economy.
The one-year loan prime rate (LPR) - on which most new and outstanding loans are based - was left at 3.65%.
The five-year LPR, considered a reference rate for mortgages, was held at 4.30%. China last cut both LPRs in August.
The January LPR setting is in line with the result of a Reuters poll conducted this week, where nearly two-thirds of the respondents predicted no change to the LPRs.
The imminent Lunar New Year holiday, the decision by the People's Bank of China (PBOC) to leave its policy rate unchanged this month, and a new mortgage rate mechanism, were cited by analysts as reasons for the inaction.
Still, analysts expect more easing ahead. Capital Economics expects rate cuts may happen as soon as next month.
China's economy grew just 3% in 2022, far below the official target, while the government's abrupt end to its zero-COVID policy has fanned hopes of a robust recovery.
However, three years of zero-COVID might have left scars that could hinder a consumption recovery in the future, Goldman Sachs said in a report on Thursday.
The publishing of January's LPRs came on the last working day in China before the week-long Spring Festival holiday.
It also came after China this month established a dynamic adjustment mechanism on mortgage rates for first-time home buyers. Analysts say the policy change lowers the urgency to reduce the five-year LPR.
The LPRs are calculated each month after 18 designated commercial banks submit quotes to the National Interbank Funding Center, a PBOC affiliate.
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