WHY IT'S IMPORTANT

Stronger-than-expected first-quarter economic growth data might have reduced the urgency for immediate monetary easing even as markets wager more stimulus is likely in coming months to keep growth on an even keel amid an intensifying Sino-U.S. trade war.

Policymakers are also wary of a weakening Chinese yuan and shrinking interest margins at lenders, limiting the scope for easing.

BY THE NUMBERS

The one-year loan prime rate (LPR) was kept at 3.1%, while the five-year LPR was unchanged at 3.6%.

In a Reuters poll of 31 market participants conducted last week, 27, or 87%, expected no change to either of the rates.

CONTEXT

China's gross domestic product (GDP) grew 5.4% in the first quarter, beating expectations, but markets fear a sharp downturn in the year ahead as U.S. tariff policies pose the biggest risk to the Asian powerhouse in decades.

Export data was yet to capture the impact of higher U.S. tariffs as many factories front-loaded their orders to beat the duties, analysts said.

A string of global investment banks have lowered their projections for China's economic growth this year and expected more monetary easing measures to underpin the economy.

KEY QUOTES

** Xing Zhaopeng, senior China strategist at ANZ, said the steady LPR fixings suggested that policymakers remain in a wait-and-see mode.

"The impact of tariffs is mainly on exports. Given the sound economic growth in the first quarter, it may be easier to introduce targeted measures for export companies," Xing said.

** "The LPR is not seen moving without a cut to the seven-day reverse repo rate first," economists at ING said in a note.

"Low inflation and strong external headwinds amid escalating tariff threats provide a strong case for easing. But currency stabilisation considerations may prompt the People's Bank of China to wait until the U.S. Federal Reserve cuts borrowing costs."