SHANGHAISINGAPORE, Aug 20 Reuters China left benchmark lending rates unchanged at a monthly fixing on Tuesday, in line with market expectations.

WHY IT39;S IMPORTANT

The steady monthly LPR fixings met market expectations, as shrinking interest margins at lenders hampered continued easing efforts after China lowered a string of key interest rates a month earlier.

BY THE NUMBERS

The oneyear loan prime rate LPR was kept at 3.35, while the fiveyear LPR was unchanged at 3.85.

In a Reuters survey of 37 market participants conducted this week, all respondents expected both rates to stay unchanged.

CONTEXT

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

China surprised markets by cutting major short and longterm interest rates in July, its first such broad move in almost a year, signalling policymakers39; intent to strengthen economic growth.

The sequence of the rate cuts also showed the PBOC39;s monetary framework had changed, shifting the shortterm rate to being the main signal guiding markets, traders and analysts said.

China39;s bank lending tumbled more than expected last month, hitting the lowest in nearly 15 years, dragged down by tepid credit demand and seasonal factors and raising expectations that the central bank may deliver more easing steps.

KEY QUOTES

Economists at Goldman Sachs The expansionary fiscal policy, along with other support including continued monetary policy…