With the current COVID-19 impact on the world economy and the much pressure on world’s central banks to do more to salvage the economy, The U.S. Federal Reserve, Bank of Japan and European Central Bank, which together cover almost half of global output, will all convene meetings of policy makers this week after the pandemic-driven freezing of economies and turmoil in financial markets propelled them into action.
Certain measures have been put place, such as driving interest rates to record lows and asset purchases expenditure, among others; to support individual countries economies which confronted by possible recession as a result of coronavirus.
Therefore, monetary policy makers may have to do more to limit the recession and speed up economies recovery. Both on the existing measures in place and other stimulus which may include access to ease credit to troubled businesses, especially small and medium scale businesses; thereby keeping credit flowing to businesses.
The U.S. Federal Reserve and its global counterparts moved aggressively with sweeping emergency rate cuts and offers of cheap dollars to help combat the coronavirus pandemic that has jolted markets and paralyzed large parts of the world economy. The U.S. decision triggered emergency policy easings by central banks in New Zealand, Japan and South Korea, with Australia also joining with a liquidity injection in a coordinated move aimed at stabilizing confidence as the pandemic threatened a global recession.
“The virus is having a profound effect on people across the United States and around the world,” Fed Chair Jerome Powell said in a news conference after cutting short-term rates to a target range of 0% to 0.25%, and announcing at least $700 billion in Treasuries and mortgage-backed securities purchases in coming weeks.