The United States has taken several measures to increase the availability of funds for loans, along with a reduction in policy interest rates by two and a half percent in two weeks.
Coronavirus is seeing havoc on the worldwide economy.
The reason is that to give the economy a breather, all the central banks of the world are constantly cutting interest rates. The Central Reserve Bank of America has reduced the policy interest rate by about one percent to almost zero percent on Sunday to remove the impact of the corona virus on the economy and maintain investor confidence.
Apart from this, it has also decided to buy bonds worth $ 700 billion. The interest rate for the Federal Reserve short-term money has now come down to 0–0.25%.
The United States has taken several measures to increase the availability of funds for loans, along with a reduction in policy interest rates by two and a half percent in two weeks. Other major central banks of the world have also cut their rates.
Corona virus has infected more than 1,56,000 people worldwide. Due to this, more than 5,800 people have died across the world. In the US alone, more than 3,700 people have been infected and 68 people have died.
The epidemic has disrupted the global supply chain. It is beginning to have a serious impact on the global economy. Scientists, research institutes and pharmaceutical companies are trying to find a cure for this disease.
In such a situation, the Federal Reserve has made a second emergency cut in the policy interest rate in less than two weeks to support the economy. After this second cut, the policy interest rate in America has come down to the level of the time of the 2008 economic crisis. The new policy interest rates have come from zero to 0.25 percent.
The Federal Reserve said that the policy interest rate will be maintained at the same level until the decline in confidence in the economy due to the corona virus is recovered.
He said, “Corona virus has caused harm to society and has caused obstacles in economic activities in many countries including America.”
Federal Reserve Governor Jerome Powell said that it also had an impact on the global financial situation.
He said, “The corona virus will have an impact on economic activity in the near future and this poses a risk to the economic scenario.” We have given concrete response to this and not only reduced the interest rate but also took steps towards liquidity.
President Trump, who has consistently criticized the Federal Reserve, also welcomed the move.
He said, ‘I congratulate the Federal Reserve. People in the market will be excited by this. We have reduced policy rates to almost zero.
The Federal Reserve also announced a wide-ranging purchase.
In order to provide financial assistance to banks and companies, the Federal Reserve has also opened up the option of providing loans to eligible banks on a short-term basis. Also, the Federal Reserve has removed the provision of cash reserved for banks, so that they can use this cash.
