Several global central banks, including the Federal Reserve (Fed) and the European Central Bank (ECB), announced on Wednesday a reduction in reference interest rates, in light of the strengthening financial crisis worldwide, according to global agencies.
The European Bank, the Bank of Canada, the Bank of England, the Federal Reserve, the Swedish Central Bank, and the Swiss National Bank jointly decided to lower their reference interest rates, as stated in their press releases, published almost simultaneously. The American Fed announced that it would reduce the targeted federal funds rate by 50 basis points to 1.5 percent.
The European Bank is lowering the refinancing rate benchmark by 50 basis points to 3.75 percent, while the Bank of England is reducing its key interest rate to 4.5 percent. The interest rate for sterling has remained unchanged for the past five months at 5 percent, as the Bank of England, like the European Bank, prioritized the fight against inflation. The Swiss National Bank has reduced the reference interest rate by 0.25 percent.
The Japanese bank has not yet reported a reduction in the interest rate but “expresses support for all activities,” according to the European Central Bank. At the same time, the People’s Bank of China also announces a reduction in the one-year reference interest rates, marking the second reduction in the last month, as stated in the bank’s online announcement. The banks announced that they coordinated this extraordinary step during a teleconference. The last time global central banks coordinated and reduced interest rates on such a scale was after September 11, 2001, and the terrorist attacks on New York and Washington. (H)
