(Yicai Global) March 15 -- The People’s Bank of China has kept the loan prime rate, the benchmark lending rate for businesses, unchanged for the past few months and is unlikely to make any further cuts this month as the latest macroeconomic data has improved considerably, market analysts told Yicai Global.

The central bank is not under great pressure to lower the LPR, which is normally announced on the 20th of every month, as the trend of economic recovery has become clear in the first quarter, Wang Qing, chief macro analyst at Golden Credit Rating International, told Yicai Global.

As China’s economic operations stabilize and rebound, reducing rates further is becoming less of a priority, said Wen Bin, chief economist at China Minsheng Bank. Today, the PBOC left the medium lending facility rate unchanged.

The latest data confirms a marked uptick in the economy. In the first two months, the value-added of industrial enterprises above a designated size gained 2.4 percent from the same period last year, faster than December’s 1.3 percent clip, according to National Bureau of Statistics' figures.

While retail sales of consumer goods climbed 3.5 percent over the period to CNY7.7 trillion (USD1.1 trillion), a huge improvement on December’s 1.8 percent fall.

The one-year LPR should stay the same this month as firms' borrowing rates are much lower than personal mortgage rates, Wang said. The PBOC is able to guide banks to keep business loan rates low by using a number of structural policy tools.

The five-year LPR, though, may still be trimmed in the first half to bring mortgage rates down so as to boost demand in the real estate market and help the property sector realize a ‘soft landing’ as soon as possible, Wang added.

Some banks, though, are not willing to cut lending rates as many are under pressure from yield spreads and the real economy's need for credit, loans and financing is recovering. The PBOC could still lower the reserve requirement ratio this year, considering historical precedent and the need to relieve banks' debt stress and steady the economy, Wen said.

This quarter, the government will mostly push infrastructure investments to maintain double-digit growth, Wang said. It will go all out to boost consumption, increase support for the real estate sector and introduce other measures to keep the economy on an upward trend.

Editors: Tang Shihua, Kim Taylor