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SHANGHAI/SINGAPORE – China left benchmark lending rates unchanged at a monthly fixing on Monday, matching expectations, as a weaker yuan continued to limit further monetary easing and policymakers waited to see the effects of previous stimulus on credit demand.
Recent data shows the recovery in the world’s second-largest economy remains patchy with industrial output and retail sales surprising on the upside but deflation gathering pace and few signs the struggling property market will bounce back any time soon.
While the economy still needs more policy stimulus, an escalation of monetary easing would add unwanted downside pressure on the Chinese currency.
