<\/p>\n
\n Share:<\/span><\/p>\n The\u00a0People’s Bank of China\u00a0announced on Wednesday that it maintained the Loan Prime Rate (LPR) unchanged\u00a0across the time curve.<\/p>\n The Chinese central bank left the one-year and five-year LPR steady at 3.45% and 4.20%, respectively.<\/p>\n At the time of writing,\u00a0AUD\/USD\u00a0is holding lower ground near 0.6750, losing 0.16% on the day.<\/p>\n The People\u2019s Bank of China\u2019s (PBoC) Monetary Policy<\/a> Committee (MPC) holds scheduled meetings on a quarterly basis. However, China\u2019s benchmark interest rate \u2013 the loan prime rate (LPR), a pricing reference for bank lending \u2013 is fixed every month. If the PBoC forecasts high inflation (hawkish) it raises interest rates, which is bullish for the Renminbi (CNY). Likewise, if the PBoC sees inflation in the Chinese economy falling (dovish) and cuts or keeps interest rates<\/a> unchanged, it is bearish for CNY. Still, China\u2019s currency doesn\u2019t have a floating exchange rate determined by markets and its value against the US Dollar is fixed mainly by the PBoC on a daily basis.<\/p>\n <\/p>\n Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. Higher interest rates generally help strengthen a country\u2019s currency as they make it a more attractive place for global investors to park their money.<\/p>\n<\/section>\n Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. <\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":" Share: The\u00a0People’s Bank of China\u00a0announced on Wednesday that it maintained the Loan Prime Rate (LPR) unchanged\u00a0across the time curve. The Chinese central bank left the one-year and five-year LPR steady at 3.45% and 4.20%, respectively. Market reaction At the time of writing,\u00a0AUD\/USD\u00a0is holding lower ground near 0.6750, losing 0.16% on the day. About the People\u2019s […]<\/p>\n","protected":false},"author":2,"featured_media":87254,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[173],"tags":[201,248,386,251,246,257,255,684,250,333,252,450,247,253,249,256,254],"class_list":["post-215960","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-others","tag-blockchain","tag-bsc","tag-centralbanks","tag-chainlink","tag-coin","tag-cryptocurrency","tag-gta","tag-interestrate","tag-looks-rare","tag-macroeconomics","tag-oracle","tag-pboc","tag-polygon","tag-quickswap","tag-safe-moon","tag-wallet","tag-wordpress"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/215960","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=215960"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/215960\/revisions"}],"predecessor-version":[{"id":215962,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/215960\/revisions\/215962"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/87254"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=215960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=215960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=215960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Market reaction<\/strong><\/h2>\n
About the People\u2019s Bank of China Interest Rate Decision<\/strong><\/h2>\n
Interest rates FAQs<\/strong><\/h2>\n
If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.<\/p>\n<\/section>\n
If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.<\/p>\n<\/section>\n
Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.<\/p>\n<\/section>\n<\/div>\n