*The Coronavirus Toll As of March 3;
Number of Cases Worldwide: 90,911
Death Rate 3.4%
Interest Rates in Question
The European Central Bank (ECB) is the latest major bank participating in the interest rate debate amidst the economic effects of the coronavirus, following statements by its counterparts in the US, Japan, and Britain.
In a short statement published by the ECB on the website late Monday, the banks emphasized that the coronavirus epidemic was a rapidly developing situation that posed a risk for the economic outlook and the functioning of the financial markets.
“The ECB is closely monitoring developments and their implications for the economy, medium-term inflation and the transmission of our monetary policy,” the bank said.
“We stand ready to take appropriate and targeted measures, as necessary and commensurate with the underlying risks.”
However, on Tuesday, ECB member and Austrian Central Bank (OeNB) President Holzmann said he would not currently support another rate cut as a countermeasure against the coronavirus.
Finance ministers and central bank heads of the 7 developed economies met urgently in London on Tuesday to discuss measures against the coronavirus.
US Central Bank President Jay Powell and Treasury Secretary Steven Mnuchin were attending the meeting on behalf of Washington.
“Given the potential impacts of COVID-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks. Alongside strengthening efforts to expand health services, G7 finance ministers are ready to take action, including fiscal measures where appropriate, to aid in the response to the virus and support the economy during this phase. G7 central banks will continue to fulfill their mandates, thus supporting price stability and economic growth while maintaining the resilience of the financial system,” a communique by the group read.
The Bank of England BoE President Mark Carney said the bank will take all necessary steps to help the economy and the financial system, and adding that they were in contact with the international public including the G7, G20, and IMF, regarding the coronavirus.
“Interest rates will probably remain low for a while,” Carney said.
The Australian Central Bank, RBA, cut its interest rate down to a new record low of 0.5% due to the “significant impact” of the coronavirus epidemic on the continental economy and signaled that it was ready to lower even further if and when necessary.
The global outbreak of the coronavirus is expected to delay progress in Australia towards full employment and the inflation target,” said RBA Governor Philip Lowe.
US Democrats’ race gets hotter today as 14 states go to the polls to choose between former Vice President Joe Biden and the independent Socialist Bernie Sanders among other candidates.
Biden’s chances increased as his rivals Pete Buttigieg and Amy Klobuchar withdrew from the race and endorsed him after the former won the state of South Carolina over the weekend.
Wall Street will focus on whether the centrist politician Biden will sideline Sanders who frightens the status quo with the promise of smashing large banks, taking over pharmaceutical companies, raising taxes, removing student debt, and bringing federally administered free healthcare system.
Source: World Health Organization, China National Health Commission, John Hopkins University Center for Engineering and Systems Sciences, Reuters