Influenced by factors like divergent monetary policies and the strength of the US dollar index, the Chinese yuan exchange rate has been consistently weakening this week.
However, multiple industry insiders have indicated that while interest rate cuts could lead to a short-term decrease in yuan yields, this might exert certain pressures on cross-border flows and the yuan’s exchange rate.
Nonetheless, in the long term, interest rate cuts can alleviate domestic debt burdens and enhance the investment return rate within the domestic economy.
Stability in the economy can, in turn, attract the inflow of cross-border capital, providing support to the exchange rate.
Industry experts emphasize the need for a dynamic and comprehensive perspective on the impact of interest rate cuts on exchange rates.
