A view of the PBC's headquarters in Beijing Photo: cnsphoto

China's benchmark lending rate remains unchanged in July compared to the previous two months, with some experts predicting that China will continue to maintain the rate at its current level as the economy rapidly improves. 

According to statistics released Monday by the People's Bank of China, the central bank, the one-year loan prime rate (LPR) stood at 3.85 percent in July, while the five-year LPR stood at 4.65 percent, both unchanged from the previous two months. 

The PBC has not changed the LPR for three consecutive months. 

Wu Chaoming, vice president of the Chasing Institute, told the Global Times Monday that the government didn't change the lending rate as China's economy continues to show an improvement trend, with second-quarter GDP moving to a positive growth rate of 3.2 percent, and economic growth is expected to increase further in the second half of the year to an estimated 6% expansion.

He said China's future monetary policies will enter a "digestion period" during which the effects of previous policies will manifest, and the government will maintain the stable interest rate level to allow for policy space for future uncertainties. 

He noted that chances are relatively low that China will lower the LPR in the second half of the year. 

"As China's economy improves and overseas economies speed up their recoveries, Chinese companies have walked out of the worst period under the shadow of the coronavirus. As a result, periodical monetary policies are gradually withdrawing, and the PBC is no longer impulsively lowering the interest rate level," Wu told the Global Times. 

Zhao Qingming, a veteran financial expert, also said that lowering the LPR would add fuel to already heated mainland markets, which is against the government's wish of a slow bull market. 

"Chances are very little for the government to cut the interest rate or reserve requirement ratio in the second half of this year, unless a future economic rebound is worse than market expectations, and the stock market tumbles heavily," Zhao told the Global Times Monday. 

Mainland stocks rallies significantly Monday, with the Shanghai Composite Index edging up 3.11 percent and the Shenzhen market rising 2.55 percent.