SHANGHAI, March 20 Reuters China kept its benchmark lending rates unchanged for the seventh straight month in March, as expected, with the economy already benefiting from policy actions taken last week as it recovers from the pandemic.

The need for more imminent monetary easing subsided after the People39;s Bank of China PBOC said on March 17 it would cut the amount of cash banks must set aside as reserves, market watchers said.

On Monday, the oneyear loan prime rate LPR was kept at 3.65, while the fiveyear LPR was unchanged at 4.30.

The necessity and urgency of interest rate cuts in the short term are not very high, said Bruce Pang, chief economist at Jones Lang Lasalle.

Although the recovery was still gathering pace, China was constrained in easing monetary policy by such factors as the yuan exchange rate and global monetary tightening, he said.

Economists say that if China cuts interest rates as other countries raise them, widening yield differentials will put downward pressure on the yuan and risk capital outflows.

A bout of data in the past two weeks has shown that economic activity picked up in the first two months of 2023 as consumption and infrastructure investment drove recovery from pandemic disruption. That has offset weak global demand and a persistent downturn in China39;s property sector.

In a Reuters poll conducted last week, all 22 participants predicted no change to either loan prime rate. Such unanimity has been rare in previous surveys.

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