Corona Virus: US Federal Reserve reduces interest rate to 0%
On February 16, 2020, the United States Reserve Bank announced that the key interest rates are to be slashed to 0% to 0.25%. This is being done in response to growing impact of Corona Virus.
This is the second emergency cut by the reserve bank in less than two weeks. Similar rate cuts were made by the bank earlier only during 2008 global financial crisis.
Global Impacts of Corona Virus
The Global Economy has been badly hi due to Corona Virus. With countries imposing travel ban and business meets and industrial summits being postponed, the global market is hit badly. After China, Spain has shut down its communication with the external world.
Global Economic Slow Down
The Organization of Economic Cooperation and Development downgraded world GDP growth. Earlier its was predicted that GDP growth for the year 2020 will be 3%. Now it has been reduced to 2.5%
The Purchasers Managers Index that was between 45 and 55 for the global powers has reduced to 40 and 50. Of all the China’s manufacturing powers were hit hard. This has affected Vietnam, South Korea and Singapore.
With OPEC’s unable to succeed its deal in cutting oil production, the oil prices have lowered. This has hit oil industries greatly.
Category: International Current Affairs