August LPR is released: 1-year at 3.0% and 5-year and above at 3.5%, holding steady for 15 consecutive months. The 7-day reverse repo rate that the LPR is anchored to has been maintained at 1.40% since May 2025. With banks’ net interest margin at 1.41% still at a low level, quoting banks lack the incentive to proactively cut their rates. However, many institutions expect that before the end of Q3, the central bank may introduce incremental policy measures such as interest-rate cuts and reserve-requirement cuts. According to 东方金诚, the expected rate cut is about 10 basis points and the reserve-requirement cut is 0.5 percentage points. Against this backdrop, the widening U.S.-China interest rate spread combined with expectations of domestic policy easing may keep the RMB broadly strong in the near term; meanwhile, investors should watch how subsequent policy signals affect the pace and rhythm of FX market movements. $USDCNH $DXY are for informational purposes only and do not constitute investment advice.