Covid-19: US reduces interest rate to 0% and launches $700bn stimulus

Covid-19: US reduces interest rate to 0% and launches $700bn stimulus

- The Federal Reserve of the United States of America has announced a reduction in interest rates

- It disclosed that the rates are now between 0% to 0.25%

- It has launched a $700 billion quantitative easing (QE) programme to protect the economy

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The Federal Reserve of the United States of America has announced a $700 billion quantitative easing (QE) programme.

This comes after its decision to reduce the interest rate to zero in the wake of the coronavirus pandemic.

The QE programme is designed to help with the purchasing of assets such as the Treasury and mortgage-backed securities.

READ ALSO: Ramaphosa on coronavirus: Thuma Mina is upon us like never before

Coronavirus: USA’s Federal Reserve reduces interest rate to 0; launches $700 bn programme

Jerome Powell, Chairman of the Federal Reserve Source: nytimes.com
Source: UGC

According to the Federal Reserve, the outbreak of the coronavirus has disrupted economic activities in several countries around the world.

As per a report by CNBC, it added that the intended measures are to help protect the economy from the effects of the coronavirus.

The interest rate would range between 0% to 0.25%, which a reduction from the previous 1% to 1.25%.

The Federal Reserve has also reduced the rate of emergency lending at the discounted window for banks by 125 basis points to 0.25%.

It again increased the term of loans to 90 days but none of these measures were enough to stop a negative response from the market.

READ ALSO: Covid-19: Ramaphosa reassures SA 'This will pass and we will recover'

Meanwhile, Briefly.co.za earlier reported that following President Cyril Ramaphosa's declaration of a national disaster due to the coronavirus pandemic, the nation's ministers have filled South Africa in on their plans.

From health to transport, leadership provided details on the measures implemented by the government.

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Source: Briefly.co.za

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