China cuts interest rates to expand domestic demand and stimulate real estate
14 сен 2023 16:51 reported by Ranny Fang
Every time the US raises interest rates, it will lead to economic turmoil and affect other countries' financial conditions. The reason is that the US has established a global dollar clearing system and major commodities are settled in dollars.
During the pandemic, the US sent money to its people, which caused the US economy to overheat in the past two years and prices to rise sharply. Therefore, the US needs to vigorously raise interest rates to bring the US economy back to normal from an overheated state.
On the contrary, China cut interest rates because no money was paid to the people during the epidemic, so China's economy has been in a normal state. Hence, China needs to cut interest rates to stimulate the economy.
The impact of China's interest rate cut on the domestic economy is that it will depreciate the CNY and benefit commodity exports, and it can expand domestic demand and stimulate the entire economy. Besides, it can also boost real estate and increase the willingness to buy houses.
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