The Sino-US trade war has warmed up, and the Federal Reserve has cut interest rates by 0.25% last week
The United States has listed China as a currency-manipulating country and the devaluation of the renminbi, and it has ushered in a wave of central bank interest rate cuts. Yesterday, New Zealand, India, and Thailand unexpectedly announced interest rate cuts. The Sino-US trade war seems to be a national currency war. The market expects that the Philippines and other central Asian central banks, the European Central Bank and the Reserve Bank of Australia will continue to cut interest rates. Under the tide of interest rate cuts, the People’s Bank of the Mainland issued a message last night saying that the news that the central bank’s interest rate cuts were not true and had reported the case to the public security organs.
With the escalation of Sino-US trade war tensions, the global economic downside risks have intensified. Recently, the Fed cut interest rates and the RMB depreciated. The countries have to cut interest rates and protect themselves, so as to appropriately devalue their currencies, boost exports and tourism, and support the mainland. economic.
The New Zealand central bank announced yesterday that it will cut interest rates by half a cent to the level of 1%, which is higher than previous market expectations
The president of the central bank, Orr, said that this interest rate cut will help reduce the chances of implementing negative interest rates in the future, and that global interest rates will fall. The decision to cut interest rates is only part of the interest rate cut cycle.
The Bank of Thailand also unexpectedly cut interest rates by 0.25% and the benchmark interest rate was reduced to 1.5%, the first rate cut since 2015. The Bank of Thailand was previously reluctant to cut interest rates due to concerns about debt levels and financial stability risks. The Bank of India also announced a rate cut of 0.35 per cent and the benchmark interest rate was reduced to 5.4 per cent, the fourth rate cut in the year; the current reduction was larger than market expectations, and interest rates fell to their lowest level since 2010.
“At present, under the global economic environment, they have to take such a measure.” Li Ruofan, an economist at Huaqiao Wing Hang Bank, said that the Fed’s interest rate cut last week set aside a rate cut by central banks, and the trade war escalated to countries, especially the Asia-Pacific region. The national economy has a large impact, so many countries have adopted interest rate cuts to hedge their risks. She predicted that there will be more interest rate cuts in Asia-Pacific countries, and the Federal Reserve, the Reserve Bank of Australia and the European Central Bank may all cut interest rates in September. She said that this wave of interest rate cuts will increase market liquidity, but as the central banks cut interest rates, the US dollar will not weaken. It is expected that the US dollar will continue to maintain a stable trend in the future.
The PBOC said that the interest rate cut is not true
Li Ruofan also pointed out that China and the United States now have signs of a change from a trade war to a currency war. The key to the future depends on whether China will let the yuan continue to depreciate sharply. The central bank is currently releasing signals to the market that it does not want excessive devaluation of the renminbi. I believe that there is little chance of a currency war at this stage. The renminbi has weakened in recent days. At present, China’s relatively high interest rates can reduce the pressure on the renminbi depreciation. Therefore, it is expected that this wave of interest rate cuts will not follow, and it may adopt an easing policy to lower the bank deposit reserve ratio to stimulate the economy. . She added that the market signal for the release of interest rate cuts is too strong. China has recently tightened its control over the real estate market, and interest rate cuts may bring new bubbles to the real estate industry.
In addition, the People’s Bank of the Mainland released a message last night saying that the news that the network passer-off will start to cut interest rates on August 10 is not true and has reported the case to the public security organ.