Interest rate cuts generally appear in a period when a country's economy is relatively weak, and are often part of economic stimulus policies. The interest rate cut means a decline in the country's currency yield.

On the one hand, it can reduce the financing cost of enterprises, improve the enthusiasm of enterprises to borrow, thus enhancing economic leverage and helping the economy get rid of weakness;

On the other hand, after the interest rate cut, its currency attraction to investors will be reduced, and the corresponding exchange rate will fall. The decline of exchange rate can help the government to increase exports and improve trade data, thus promoting economic growth. Therefore, lowering interest rates is a useful means to promote economic growth.

After interest rate cuts, the economy will gradually recover, and stimulus policies such as interest rate cuts will gradually withdraw. When the economy re-enters the expansion cycle, it will adopt the policy of raising interest rates and appreciating the currency, thus curbing the overheating of the economy.