Chinese PBOC lowered 5 years LPR by 15bps on 2022 May 20, which is first cut in 2022.
Base on Macro Economic theory, we understand there would be two main impacts of lowering interest rate(monetary stimulus): 1.lower interest rate will incent people and enterprise to borrow, spend, invest; 2. lower interest rate will lowering the carrying cost and boost all asset prices.
Regarding the first impact of monetary stimulus, holding other conditions unchange, when money price is cheap, people tend to borrow more money to expand their business.
评论 (0)