The People's Bank of China announced on Monday that it cut the one-year Loan Prime Rate by 10 basis points from 3.45% to 3.35% and cut the five-year LPR from 3.95% to 3.85%. Furthermore, the PBoC announced to cut its interest rate for the 7-day reverse report to 1.7% from 1.8%. The rate cut will be effective immediately on Monday. Additionally, the Chinese central bank also eased medium-term lending facility requirements.
The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? 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 .