When a country has a balance of payments deficit, the central bank can raise the rediscount rate, so that enterprises will get less money, the market interest rate will also rise, investment and consumption will be restrained, and prices will begin to fall, which will be conducive to exports, curb imports and improve the trade balance. At the same time, the increase of market interest rate is also helpful to absorb foreign capital, thus improving the balance of payments.

Discount policy as a means to adjust exchange rate and its mechanism;

A. When the price of foreign currency rises and tends to exceed the upper limit of exchange rate fluctuation, the state raises the discount rate to attract foreign capital inflows and increase foreign exchange income, thereby reducing its balance of payments deficit and lowering the price of foreign currency expressed in its own currency, so as to keep the exchange rate within the established fluctuation range;

B. When the price of foreign currency falls below the lower limit of exchange rate fluctuation, the state lowers the discount rate, thus inducing capital outflow, increasing the demand for foreign currency, raising the price of foreign currency expressed in domestic currency, reversing the downward trend of exchange rate and maintaining the limit of exchange rate fluctuation.