China kept its benchmark lending rates --- loan prime rate or LPR --- unchanged in April after posting a better-than-expected economy during the first quarter despite the ongoing Middle East conflict.
The People's Bank of China held the one-year LPR at 3% and the LPR of five years or more at 3.5% for the 11th consecutive month, according to a Monday press release from the central bank.
Analysts from ING expected no changes to the LPR, following the country's first-quarter economy, which remained within the year's target range of 4.5% and 5%.
Official gross domestic product grew 5% during the period, according to last week's data from the National Bureau of Statistics. It came after inflationary growth in March slightly eased 1% from the 1.3% hike in February.
Yu Song, UBS Securities' China economist, said the government might be taking a "wait-and-see" approach as it takes time to evaluate the impact of the conflict between the U.S. and Iran, according to a Sunday report from CNBC.
In an April 16 note, ING's chief economist for greater China, Lynn Song, said China would likely need to introduce more financial stimulus if external demand starts to weaken.
Official data from the NBS showed that exports in March rose 2.5% but have been a drag compared to the 21.8% surge in the period between January and February.
Still, China outperformed its international counterparts amid the oil price shock brought by the Iran war, ING's Song said.
"This came despite widening U.S.-China yield spreads. The main factor in the near term is likely the People's Bank of China signaling tolerance for further appreciation after briefly pushing back on it before the Iran war," Song said. "Sentiment may also have been buoyed by renewed talk of a potential 'petroyuan' emergence after reports that Iran wished to collect tolls on passage through the Strait of Hormuz in CNY (renminbi)."