Steps To Counter The Economic Fallout Due To Coronavirus
The Noble Coronavirus (COVID-19) is gradually weaving a pandemic canvas over the globe. Within a few months, it has infected nation after nation and stands as the new name of terror in the world. The contagion has already infected 225,254 individuals and has a death toll of 9,276 individuals around the world. Along with an enormous death count, the virus has viciously taken down the economic structure of many economies. However, every time mankind has faced extinction, people have joined hands to ensure the survival of species. Like that, countries around the world have devised measures and collaborated to retaliate against the economic downfall of their nations.
Below portrayed are the measures of a few strong economies, whose measures are undeniably the foremost ones – the remaining economies should look up, to stand strong during this global recession period.
UNITED STATES: U.S. Federal Reserve has taken down the banking rates near to zero and re-initiated bond-buying. Along with that, they have looked back to their primitive crisis-era to proffer tool-kit to survive against this global crisis. Along with, this the body has collaborated with other central banks and encouraged them to use their trillions of dollars in equity and liquid assets to help businesses and families, whose balance sheets have deteriorated and lives have been shattered by the Coronavirus.
Central banks of the U.S, the Eurozone, Canada, Britain, Japan, and Switzerland have joined hands to offer three months credit in US dollars at cheaper rates. The US Treasury Dept. have also decided to postpone tax payments without any interest or penalties for specific people and businesses, who are going through the turmoil. Additionally, they are also aiming to provide more than $200 billion of liquidity to further help the economy.
CHINA: China was ground zero and is the most affected country by the virus. To overcome the crisis, the country has assigned 110.5 billion yuan ($15.9 billion) to fight the pandemic. Also, Beijing has increased its funding assistance fo infested regions and its central bank has cut several key rates, including the benchmark lending rate, and has urged banks to give affordable loans to exposed companies.
ITALY: Italy has been the second most infected country by Coronavirus with 35,713 cases. The virus has made a massive negative impact on the economy. Fathoming to this, Economy Minister Roberto Gualtieri announced that the govt. is aiming to proffer an economical package of 25 billion euros ($28 billion), to assist companies and workers during this period of crisis. Besides this, the govt. has assured that mortgages will be suspended across the country. Adding to this, Italy’s banking lobby ABI has asked lenders
offer debt prohibitions to the small firms and families blemished due to this pandemic crisis.
JAPAN: The Bank of Japan has said it would double its purchases of risky exchange-traded funds (ETFs) to incubate an economical length of 12 trillion yen ($112.6 billion) a year and extend a new loan program with zero-rate loans to financial institutions to boost loans to those damaged by the outbreak. Moreover, to ensure the freewheeling operations of credit markets, it is willing to earmark 2 trillion yen for additional purchases of commercial paper and corporate bonds. Apart from that, the government is proffering to spend $4 billion to cope with this massacre (support to MSMEs).
GERMANY: Germany’s centre-left coalition is aiming to enhance public investments by 12.4 billion euros by 2024. This approach is focused to provide easier subsidies for companies to support workers on reduced working hours to counter the effects of the coronavirus pandemic.
BRITAIN: Britain has announced a 30 billion-pound ($39 billion) financial boost plan, as soon as the Bank of England slashed interest rates. This stimulated package is aimed at tackling the risk of coronavirus recession.
FRANCE: The French Govt. has provisioned companies to take off a few payments related to social charges and taxes. Adding to it, the govt. is activating state-subsidized short-time work schemes. It has also ordered Bpifrance state investment bank to ensure loans required to overcome the cashflow issues. The Central State has allowed companies to activate “Force Majeure” in case they are not able to put forth a contract with the public sector and large enterprises to suffice requirements, in this hour of panic.
INDIA: RBI is working on infusing liquid cash through long-term repo operations (LTRO). This shall help in economic revival and growth. Meanwhile, India is urging state-banks to assign ₹ 500-600 billion by the end of March to sustain in this period of crisis.
CANADA: According to Finance Minister, Bill Morneau, The Bank of Canada lowered its benchmark rate overnight after the first death report. The rate has been lowered to 1.25% from 1.75% in response to the pandemic, prompting financial markets to price in a better-than-even chance of another reduction next month.
SOUTH KOREA: The Korean Govt. has proclaimed an 11.7 Trillion ($9.8 billion) package to aid the largest outbreak outside China. Adding to it, 10.3 Trillion from treasury bonds is meant to be issued to aid the budget. Seoul has further constrained rules on short-selling from March 11 for three months. Stocks having a simultaneous increase in short-selling transactions will be adjourned from further short-selling for 10 days