(Yicai) March 20 -- China will maintain its benchmark interest rates for corporate lending and mortgages stable for the fifth straight month this month, reserving room for future economic stimulus.

The one-year loan prime rate was retained at 3.1 percent and the five-year LPR remains 3.6 percent, the National Interbank Lending Center under the central bank announced today. The last time the two maturities of the reference rate were altered was last November.

Golden Credit Rating pointed out that the stable policy direction was in line with market expectations because this month, the People's Bank of China has retained the same seven-day reverse repo rate, the basis for LPR quotations. Moreover, the panel of chosen banks refrained from quotation cuts to prevent an excessive circulation of funds and a rapid slump in long-term bond yields amid a decline in several types of loan interest rates.

The credit rating agency added that the LPR also remains unchanged because last year's package of incremental policies is taking effect. Early this year, the macro economy maintained strong growth momentum while consumption and investment increased so interest rate cuts were not deemed urgent.

Golden Credit Rating said that the second quarter may open a window for interest rate cuts with falling LPR quotations. In the future, the LPR could be altered more independently from the quotations to manifest the central bank's goal of clearing out monetary policy channels while improving the interest rate mechanism.

Pan Gongsheng, governor of the PBOC, said on March 6 that the reserve requirement ratio and interest rates will be cut when appropriate based on domestic and foreign economic and financial conditions and the performance of the financial market.

The average RRR for financial institutions stands at 6.6 percent, and there is still room for trimming, Pan said. The central bank will study new structural monetary policy instruments to support investment and financing in scientific and technological innovation, he added.

Editor: Emmi Laine