Stronger yuan among reasons for lowering rates
China’s monetary policy may switch gears in the coming months with the recent interest rate cut of its medium-term lending facility (MLF) signaling a lower loan prime rate (LPR). A Stronger yuan against the US dollar also provides more policy maneuvers for the Chinese monetary authority to follow suit in the new trend of global monetary easing.
China’s current situation means its central bank can afford lower interest rates. If there is a new wave in the global economic downturn, China is better prepared and has more countermeasures in the bag than other countries like the US.