(Yicai Global) Aug. 20 -- China left its benchmark interest rate unchanged this month, as expected, but according to analysts corporate borrowing rates may come down as marginal costs at lenders fall.

The People’s Bank of China, the central bank, kept the one-year loan prime rate steady at 3.85 percent and the five-year LPR at 4.65 percent today.

The PBOC cut the reserve requirement ratio for commercial banks last month, which cut their cost of funding to a degree, but was not enough to prompt lenders to reduce their LPR quotations, Wang Qing, chief macro analyst with Golden Credit Rating International, told Yicai Global.

Corporate loan rates could drop this quarter despite the unchanged LPRs mainly because of the supply and demand balance as well as policy guidance in the credit market, Wang said. The authorities have urged banks to transfer policy dividends to the real economy, he said, as demand for business loans has weakened amid curbs on urban real estate financing that has squeezed the potential room for an increase in loan rates.

The corporate loan demand index was at 70.5 percent in the three months ended June 30, down from 77.5 percent in the first quarter, according to the PBOC’s second-quarter survey.

The two monthly LPR quotations remained unchanged following the across-the-board RRR cut last month, meaning macro policies will focus on the long-term balance between stabilizing economic growth and preventing risks in the second half of this year, industry insiders noted. This also suggests China will not got for strong stimulus this half, so a simultaneous cut in the RRR and policy interest rates is unlikely.

It will not be difficult for China to achieve the goal of 6 percent economic growth this year, but the country will face greater pressure on stabilizing growth, said Wen Bin, chief researcher at China Minsheng Bank, who also said strong stimulus policies such as lowering the interest rate are unlikely before the end of this year.

Editors: Tang Shihua, Tom Litting