What are the benefits of cutting interest rates?

Market interest rate has always been an important indicator of investors' concern, and many investors expect to cut interest rates. So what are the benefits of cutting interest rates? What is the benchmark interest rate? Xi Cai Jun has also prepared relevant contents for your reference.

What are the benefits of cutting interest rates?

1, reducing borrowing costs. The interest rate cut means that the bank's loan interest rate will also be lowered accordingly, so that investors can enjoy lower borrowing costs in terms of house purchase, car purchase, entrepreneurship and education, thus reducing the repayment pressure and improving the quality of life.

2. Improve investment income. Reducing interest rates means that the market is more abundant in capital supply, which can increase market liquidity, strengthen the stock market and increase investors' income.

3. Stimulate consumer demand. Interest rate cuts mean that the income of deposits will decline, prompting investors to spend more money on tourism, entertainment, shopping and other consumption, stimulating economic growth.

What is the benchmark interest rate?

Benchmark interest rate refers to the deposit and loan interest rate standards for various periods stipulated by the central bank, which has an important impact on investors' expectations. The benchmark interest rate can be divided into deposit benchmark interest rate and loan benchmark interest rate. The benchmark deposit interest rate mainly affects the interest income of investors who deposit money in banks, thus affecting investors' willingness to save and their spending power. Generally speaking, the higher the benchmark deposit interest rate, the stronger the investor's willingness to save and the weaker his spending power. The benchmark loan interest rate mainly affects the borrowing cost of investors, thus affecting investors' willingness to borrow and their investment ability. Generally speaking, the higher the benchmark loan interest rate, the weaker the investor's willingness to borrow and the weaker the investment ability. The deposit and loan interest rates of commercial banks usually adjust themselves on the basis of the benchmark interest rate and fluctuate within a certain range. The deposit and loan interest rates of each bank may be different, but they will not differ much.