People’s Bank of China announced interest rate cuts on the 21st, which was the first time in more than two years to reduce its deposit and lending rates, this triggered major foreign media attention. Foreign media generally believed that China may be entering the next rate cut cycle towards further liberalization of deposit and lending rates, and pointed out that the rate cut gave investors confidence and would boost the global market.
Will China enter a rate cut cycle?
"Wall Street Journal" reported that People’s Bank of China has made in more than two years, the first rate cut decision, which showed that Chinese leaders were inclined to take more steps to boost economic growth.
Reuters quoted an economist as saying PBOC should be prepared to cut interest rates further, because China has entered the rate cut cycle, the RRR cut was also possible.
"The New York Times" issued a commentary saying that China’s unexpected interest rates cut gave investors confidence. Some economists and analysts have pointed out that the rate cut would be likely to lead to more irritation economic initiatives.
"Wall Street Journal" reported that, overall, this was a step of a gradual normalization of monetary policy. In a long term, clearly this was a good thing, but in terms of timing, it was totally unexpected.
What does the interest rates cut impact on the global market?
What international influence the interest rates cut will cause? "Financial Times" pointed out that from the international situation, with the low tide of globalization the interaction impact of the globalization of capital markets has not diminished. For China, the interest rates cut directly affected the exchange rate, which will affect the different stakeholders: followed the dollar, the yuan will also be strong, which is a strong pressure on the export business. Now interest rates may allow investors to sell the yuan, it is possible to slow down or even reverse the momentum of the yuan's appreciation, which in this regard will be conducive to China's exports, on the other hand PBOC must be very vigilant of the potential capital outflow pressure.
"Wall Street Journal" also pointed out that interest rates cut would boost the global market. Market participants made a violent reaction, oil, gold, copper, stock market and commodity currencies around the world have sharply go higher.
Reuters further analyzed, the interest rate cuts may terminate the process of the appreciation of RMB, volatility may increase in the future. (www.chinainout.com)
Will China enter a rate cut cycle?
"Wall Street Journal" reported that People’s Bank of China has made in more than two years, the first rate cut decision, which showed that Chinese leaders were inclined to take more steps to boost economic growth.
Reuters quoted an economist as saying PBOC should be prepared to cut interest rates further, because China has entered the rate cut cycle, the RRR cut was also possible.
"The New York Times" issued a commentary saying that China’s unexpected interest rates cut gave investors confidence. Some economists and analysts have pointed out that the rate cut would be likely to lead to more irritation economic initiatives.
"Wall Street Journal" reported that, overall, this was a step of a gradual normalization of monetary policy. In a long term, clearly this was a good thing, but in terms of timing, it was totally unexpected.
What does the interest rates cut impact on the global market?
What international influence the interest rates cut will cause? "Financial Times" pointed out that from the international situation, with the low tide of globalization the interaction impact of the globalization of capital markets has not diminished. For China, the interest rates cut directly affected the exchange rate, which will affect the different stakeholders: followed the dollar, the yuan will also be strong, which is a strong pressure on the export business. Now interest rates may allow investors to sell the yuan, it is possible to slow down or even reverse the momentum of the yuan's appreciation, which in this regard will be conducive to China's exports, on the other hand PBOC must be very vigilant of the potential capital outflow pressure.
"Wall Street Journal" also pointed out that interest rates cut would boost the global market. Market participants made a violent reaction, oil, gold, copper, stock market and commodity currencies around the world have sharply go higher.
Reuters further analyzed, the interest rate cuts may terminate the process of the appreciation of RMB, volatility may increase in the future. (www.chinainout.com)
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