China's central bank is expected to keep rates on its medium-term policy loans unchanged on Tuesday, a Reuters survey showed, despite fresh signs the economic recovery is losing momentum.
Tumbling
credit growth and rising
deflation risks in July have called for more monetary easing measures to arrest the slowdown, market watchers said, but a weakening Chinese yuan has constrained the central bank's efforts to imminently ease policy.
"MLF rate cuts are seen as less likely at this juncture given the weakness in the yuan – USD/RMB is currently attempting to make a fresh year-to-date high," analysts at HSBC said in a note.
In a poll of 26 market watchers conducted this week, 20 participants, or 77%, predicted that the central bank would leave the interest rate on its one-year medium-term lending facility (MLF) loans unchanged when it is due to roll over 400 billion yuan ($55.11 billion) worth of such maturing loans on Tuesday.