The post PBOC reduces one-year Medium-term Lending Facility rate to 2.3% from 2.5% appeared on BitcoinEthereumNews.com.

The People’s Bank of China (PBOC), China’s central bank, cut the one-year Medium-term Lending Facility (MLF) rate from 2.50% to 2.30% on Thursday. The one-year MLF was last cut in August 2023, from 2.65%. Further, China’s agriculture and construction banks have also lowered rates, as economic woes accentuate. Market reaction Despite China’s efforts to stimulate economic growth, markets are unimpressed, with AUD/USD falling to three-month lows near 0.6550 while Gold price tumbled to ten-day lows of $2,371. Australian Dollar FAQs One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese…

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Filed under: News - @ July 25, 2024 2:12 am