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SHANGHAI, August 20 (Reuters) – China left its policy rate for loans to businesses and households unchanged for the 16th consecutive month int its August Friday fixation, as widely expected.

The one-year loan prime rate (LPR) CNYLPR1Y = CFXS was maintained at 3.85%. LPR at five years CNYLPR5Y = CFXS remained at 4.65%. The rate remained unchanged for the 16th consecutive month.

Twenty-five traders and analysts, or 78% of 32 instant poll participants, had predicted no change in either grade, while the remaining seven respondents all expected a reduction in LPR to a year.

The People’s Bank of China (PBOC) injected billions of yuan in medium-term loans into the financial system earlier this week, which many market participants interpreted as an effort to support activity, although the cost of these loans remained unchanged.

The MLF interest rate, which serves as a guide for the LPR, has remained unchanged for 16 consecutive months, leading to a stable LPR, they said.

“If the MLF rate remains unchanged, it is difficult for the LPR to move on its own,” said a trader at a Chinese bank.

(Reporting by Winni Zhou and Andrew Galbraith; editing by Jacqueline Wong)

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