On August 22nd, the data of foreign exchange trading center showed that today, the central parity of RMB exchange rate was lowered by 57 basis points to 7.0490.

Interest rate reduction means that banks use interest rate adjustment to change cash flow. When banks cut interest rates, the income of funds deposited in banks will decrease, so cutting interest rates will lead to the outflow of funds from banks, and deposits will become investment or consumption, which will lead to increased liquidity of funds.

Judging from the market chart, after the opening today, the offshore RMB did not "appreciate slightly" along yesterday's trajectory, but fell again, which seems to have fallen below the closing price of 7.0740 on Monday (August 19).

According to this mechanism, the interest rate announced will definitely be "lower" than the previous loan interest rate, just like the central bank's disguised reduction of loan interest rate, thus reducing the credit cost of enterprises, stimulating enterprise expansion, increasing employment and stimulating China's economic growth.