SHANGHAI, April 20 Reuters China surprisingly kept its benchmark lending rates steady on Wednesday, with markets seeing the move as Beijing39;s cautious approach to rolling out more easing measures as the economy slows due to COVID19 lockdowns.

In contrast to most major economies that have started to tighten monetary policy to combat inflation, China has stepped up easing to cushion the slowdown.

But such policy divergence with major central banks could prompt capital outflows, adding pressure on the yuan.

The oneyear loan prime rate LPR was kept at 3.70 and the fiveyear LPR was unchanged at 4.60.

Marco Sun, chief financial markets analyst at MUFG Bank, said policy divergence between China and the United States was likely to continue despite steady LPR in April as the PBOC39;s policy stance appeared to be more dovish.

Recovery from COVID is a challenging task for global policymakers, Sun said, adding that the economic impact from the latest wave of COVID19 infections remains uncertain.

Sun still sees a chance to lower the LPR in the second quarter of this year.

A vast majority of the 28 traders and analysts surveyed in a snap Reuters poll this week expected a reduction this month. Among them, 11, or 39 of all respondents, predicted a marginal cut of 5 basis points in both rates. 

The PBOC last week lowered the amount of cash banks must set aside as reserves by a smallerthanexpected margin to provide a relatively modest cash injection.

Global investment banks…