RRR cut is one of the central bank's monetary policies. Reducing the deposit reserve ratio indicates that liquidity has begun to enter a gradual release process.

There is more money in the market, and the oversupply will naturally depreciate. That is, active devaluation.

Generally speaking, exchange rate depreciation refers to the passive depreciation of RMB due to the strength of foreign currency (the US economy is developing well, especially the appreciation of the US dollar) or the weakness of RMB.

In this way, China's RRR cut can hedge the risk of exchange rate depreciation.