SHANGHAISINGAPORE, Oct 20 Reuters China kept its benchmark lending rates unchanged at the monthly fixing on Friday, matching market expectations, as a set of economic data suggested the economy is stabilising and a weaker yuan constrained further monetary easing.

The oneyear loan prime rate LPR was kept at 3.45, while the fiveyear LPR was unchanged at 4.20.

Betterthanexpected third quarter gross domestic product GDP and retail sales data suggest China39;s economic recovery has started to improve, needing less monetary support.

Economic activity has stabilised and authorities can afford to wait a while before deploying more monetary easing down the road, emerging market analysts at TD Securities said in a research note.

Bearish sentiment over the yuan was also seen as a factor against further rate cuts. The yuan has depreciated by more than 5 this year against the dollar and increasing liquidity would add additional pressure on the currency.

Most new and outstanding loans in China are based on the oneyear LPR, while the fiveyear rate influences the pricing of mortgages.

In a Reuters survey of 29 market analysts and traders, almost all participants predicted no change to the oneyear LPR, while all had expected the fiveyear rate to remain steady.

The steady LPR fixings follow the central bank39;s decision on Monday to roll over maturing mediumterm policy loans while keeping the interest rate on them unchanged.

The mediumterm lending facility MLF rate serves as a…