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Investing.com-- The People’s Bank of China left its benchmark loan prime rate unchanged on Thursday, in line with market expectations as Beijing looks to dole out more fiscal measures, instead of monetary easing, to support economic growth.

The PBOC left its one-year LPR at 3.6%, while the five-year LPR, which is used to set mortgage rates, was left at 3.1%. Both rates were at record lows, following a slew of cuts over the past three years. 

The LPR is determined by the PBOC based on considerations from 18 designated commercial banks, and is used as a benchmark for lending rates in the country

But the PBOC now has limited headroom to further cut the LPR, especially given that its monetary easing measures have so far provided only fleeting support to the economy.

Focus is now on more fiscal stimulus from Beijing. Chinese policymakers had recently outlined even more measures aimed at supporting consumer spending, including increased social welfare and subsidies on household goods. 

The PBOC had repeatedly cut the LPR over the past three years to support growth, albeit to limited effect. Cuts in the LPR were also aimed at supporting China’s beleaguered property market, which has so far shown few signs of improvement.

Lower interest rates also weighed on the Chinese yuan, with Beijing’s discomfort over further yuan weakness further limiting the PBOC’s ability to cut rates.

Still, analysts expect China’s LPR to fall further this year, with Beijing expected to pull out all stops to spur economic growth.