SHANGHAI (Reuters) - China’s financial markets are nearly evenly divided over whether the benchmark lending rate will be lowered or kept steady next Monday, a survey of participants showed, after the central bank kept rates on medium-term loans unchanged this week.

Twenty-eight respondents, or about 51% of those in the snap survey conducted this week, expected no change to either the one-year loan prime rate (LPR) CNYLPR1Y=CFXS or the five-year tenor CNYLPR5Y=CFXS in its monthly fixing next Monday.

Another 35% of all participants still expect a marginal reduction of five basis points in the one-year LPR, but they saw no downside adjustment to the five-year tenor.

The mixed views come as the People’s Bank of China (PBOC) injected 300 billion yuan ($43.7 billion) worth of medium-term lending facility (MLF) loans into the banking system on Wednesday but left the interest rate steady.

“Although the MLF rate was unchanged this month...but one of the policy focuses this year was to lower borrowing costs, it is not impossible to cut the LPR,” said a trader at a Chinese bank in Beijing.

MLF, one of the PBOC's main tools in flexibly managing longer-term liquidity in the banking system, now serves as a guide for the new LPR. The interest rate on the one-year MLF CNMLF1YRRP=PBOC now stands at 3.25%.

The PBOC last cut MLF rate by five basis points in November. That was followed by a reduction in the LPR by the same margin that month. In December, both rates were unchanged.

Still, analysts and economists widely believe China’s macro policy stance will remain supportive this year after economic growth slowed to its weakest in nearly 30 years in 2019.

“China needs to keep growth at a reasonable range to achieve its target for ‘full prosperity’ by 2020 - 13th five-year plan,” said Wang Tao, chief China economist at UBS, expecting a 10 to 15 basis points drop in MLF rates and further reductions in the LPR rate this year.

The LPR is a lending reference rate set monthly by 18 banks. The PBOC revamped the mechanism to price LPR last August, loosely pegging it to the MLF rate.

All 55 responses in the survey were collected from selected participants on a private messaging platform.