⚡Crypto Alert : Start Trading Cryptos with 0 Fees - Click Here

Central Banks to Resort to Extreme Measures to Support Economies in the Time of Coronavirus

Even as the coronavirus pandemic rages on and continues to hurt economies worldwide, leading central banks like the Fed and the BOE have resorted to extreme steps to protect their respective economies in recent times. On account of the prolonged shutdown, the Fed announced $2.3 trillion of funding to support local governments and small and medium sized businesses impacted by the crisis.

Meanwhile, the BOE has removed limits on overdraft for the British government as it tries to offset the economic damage from the pandemic via wage support programs for laid off workers. The British government will also incur significant expenses via its plans to cut taxes for businesses and increased welfare spending.

For now, central banks are choosing to ignore the risks of expanding their stimulus efforts as they try to protect their economies from the impact of the extended shutdowns needed to contain the spread of the virus. Rising levels of unemployment, supply chain disruptions and reduced capital spending and consumer consumption are just some of the risks that are weighing on economies as of now.

Both the Fed and the BOE have sought to reassure markets that their current spending spree is a temporary measure and is expected to last only until the pandemic is brought under control and the economy returns towards the path of recovery. Higher spending by central banks and easing measures raise the risk of hyperinflation in markets, which could create additional hurdles when the crisis abates.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Avatar
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
Related Articles
🔒 OPEN A TRADING ACCOUNT