Central banks announce more stimulus to contain the crisis

English Mar 13, 2020

The Federal Reserve announced earlier this Thursday, an injection of more than $ 1.5 trillion in the financial system, to contain funding problems associated with the effects of coronavirus, through its securities repurchase operations (repo) . The Fed also said that the $ 500 billion repurchase operations in three-month and one-month bonds will be made weekly and that purchases of at least $ 45 billion in two-week bonds will happen twice a week. In addition, the US central bank's New York district will continue to offer at least $ 175 billion in overnight bonds daily.

After the Fed's decision, the European Union also announced incentives, promising an emergency package of 37 billion euros, using "maximum flexibility in the fiscal structure", to finance urgent measures to combat the coronavirus and its economic impacts.

Finally, the Bank of Japan was the last major central bank to announce measures on Friday, with the aim of providing ample liquidity to financial companies, given the economic impact caused by the spread of the new coronavirus. As of Monday, the Japanese central bank will offer funds maturing after the end of the fiscal year in March. The BoJ added that it could use other methods, such as liquidity operations as opposed to collateral and Japanese government bond purchases (JGBs) with repurchase agreements.


Morel Hernandes

Writer passionate about politics, economics, blockchain and crypto-currencies.