The Chinese yuan is struggling for direction against its main currency rivals on Monday. Despite the central bank cutting a key interest rate in the fallout of China’s dreadful first-quarter economic reading, investors may not be convinced it is enough to achieve the government’s goal of 5% gross domestic product growth rate in the second quarter. Either way, the People’s Bank of China (PBoC) is showing the world that it is taking monetary easing seriously.

On Monday, the PBoC slashed the benchmark one-year loan prime rate, or LPR, by 20 basis points to 3.85%. It also cut the five-year LPR by ten basis points to 4.65%. This is the PBoC’s second LPR cut this year, pumping billions into the economy, and experts are not dismissing the odds of further easing. The LPR is a new benchmark that the central bank adopted, and it is primarily used for most new and outstanding loans.

Most market observers were not surprised by the move. Last week, officials reduced the one-year medium-term lending facility rate by 20 basis points and cut the reserve requirement ratio (RRR) by another 50 basis points. These interest rates typically guide the lending reference rate, which is set every month by 18 financial institutions.

In the January-to-March period, economic activity contracted 6.8% as every industry witnessed a dramatic drop. President Xi Jinping and his government are trying to trigger at least 5% growth in the April-to-June period, and it seems he will achieve this by looking inward.

Because global demand is tumbling in the wake of the coronavirus pandemic, China is turning to its domestic economy to help turn things around. A recent study found that 20% of export-oriented firms have either gone bankrupt or stopped production. This is why the PBoC is encouraging banks to lend more to borrowers, even if they fail to meet underwriting standards. Beijing is attempting to boost household consumption and demand at home, which explains why many municipal governments have handed out stimulus vouchers.

There has been speculation of pent-up demand, but some think it is a fairy tale. Li Yi, a bed-and-breakfast business owner in Chongqing, may have summarized the situation perfectly in an interview with the Nikkei Asian Review:

I can’t afford it anymore. Some believe we will see pent-up demand in the post-coronavirus era, but I think that is impossible. Everybody is struggling now. Who has the money to spend?

The USD/CNY currency pair was rose to 7.0735, from an opening of 7.0732, at 19:26 GMT on Monday. The EUR/CNY tumbled 0.03% to 7.6850, from an opening of 7.6875.