1. Capital flow: The interest rate cut by the Federal Reserve will lead to an increase in the return on investment in the US market and attract capital to the US market. This led to the withdrawal of some capital from China, which brought depreciation pressure to the RMB.
2. Trade competitiveness: With the devaluation of RMB, the competitiveness of China's export commodities in the international market will be enhanced and the prices will be more attractive. The devaluation of RMB has also triggered trade disputes in other countries and is regarded as a means of competitive currency devaluation.
3. Capital flow and foreign exchange reserves: The interest rate cut by the Federal Reserve will lead to an increase in global capital mobility, which will have an impact on China's foreign exchange reserves and capital flows. The China government needs to pay close attention to the changes in capital flows and foreign exchange reserves, and take necessary measures to maintain financial stability.