Global central banks take decisive action to battle coronavirus

Following the Federal Reserve's decision to drastically lower its policy rate by 100 basis points while launching a massive $700 billion QE program, other central banks have stepped up to the plate to negate the impact of the coronavirus outbreak. Below is a list of monetary policy actions by global central banks.

New Zealand

The Reserve Bank of New Zealand (RBNZ) lowered its policy rate by 25 basis points to 0.25%. Commenting on this decision, "the negative impact of coronavirus on New Zealand's economy is and will continue to be significant," RBNZ Governor Orr noted. "It will very much be a case of monetary and fiscal policy working together."

Hong Kong

Hong Kong's central bank announced that it reduced the countercyclical capital buffer it requires financial institutions to hold from 2% to 1% of their risk-weighted assets.

Sri Lanka

The Central Bank of Sri Lanka (CBSL) cut its key lending rate by 25 basis points to 7.25%, lowered the standing deposit facility rate by 25 basis points to 6.25%.

UAE

The United Arab Emirates (UAE) central bank cut its interest rate on one-week certificates of deposit (CDs) by 75 basis points while keeping the repo rate unchanged.

Bahrain

The Central Bank of Bahrain (CBB) lowered its policy interest rate, one-week deposit facility, by 75 basis points to 1% and cut the deposit rate from 1.5% to 0.75%. 

Brazil

The Central Bank of Brazil announced that households and businesses with good credit will be allowed to renegotiate loans. The bank further said that it aims to raise 637 billion reais for fresh lending across the economy through a 56 billion reais relaxation in banks’ capital requirements.

Vietnam

The State Bank of Vietnam said that the refinance rate will be cut to 5% from 6% and the discount rate to 3.5% from 4.0% effective Tuesday.

Egypt

Egypt's central bank lowered its key policy rate by 300 basis points to 10.25% while cutting the overnight deposit rate to 9.25% from 12.25%.

Denmark

Denmark's central bank raised the target for government bond issuance in 2020 to 125 billion Danish crowns ($18.67 billion) from 75 billion.

Czech Republic

The Czech National Bank lowered its key policy rate, the two-week repo rate, by 50 basis points to 1.75%. "We will continue considering further steps on a daily basis," Governor Jiri Rusnok said.

Chile

The Chilean central bank lowered its policy rate by 75 basis points to 1% citing a "rapid and significant deterioration" of the economy amid the coronavirus outbreak.

Saudi Arabia

Saudi Arabia's central bank cut its repo rate by 75 basis points from 1.75% to 1.00 % and the reverse repo rate by 75 basis points from 1.25% to 0.50%.