Stabilizing Interest Rates to Stabilize Exchange Rates: PBOC's Determination Should Not Be Underestimated

Huajin Securities noted that the PBOC's Q2 monetary policy implementation report indicates that a new monetary policy framework is emerging. In the context of high risks of a rebound in the U.S. dollar index and a cooling demand for debt financing due to China’s economic transition, stabilizing interest rates is key to stabilizing exchange rates, and deleveraging is essential to prevent the economy from stalling.