Group Economic Research
Major economic policy responses have been introduced to try to attenuate the impact of the Covid-19 pandemic on the economy.
This document reviews the key measures taken by central banks and governments in a large number of countries as well as those taken by international organisations.
It includes measures that were introduced through 20 April. It will be updated regularly.
Key central banks measures: US Federal Reserve (Fed) – Monetary policy measures
Fed funds target rate
15 March: the Fed funds target rate was cut by 100 basis points (bp), to a range of 0-0.25% (effective 16 March).
15 March: the discount rate was cut by 150 bp to 0.25% (effective 16 March), narrowing the spread with the Fed funds target rate by 50bp. Borrowing through the discount window was extended to periods as long as 90 days, prepayable and renewable by the borrower on a daily basis.
15 March: Interest on Reserves (IOR) and Interest on Excess Reserves (IOER) were lowered to 0.1% (effective 16 March).
Required reserve ratio
15 March: the required reserve ratio was cut to 0% (effective 26 March).
Quantitative Easing (QE)
15 March: a new round of quantitative easing with securities purchases of at least USD 700 bn over the months ahead, including USD 500 bn in Treasury securities and USD 200 bn in agency mortgage-backed securities (effective 16 March). All principal payments from the Fed’s holdings of Treasuries, agency debt and agency MBS will be fully reinvested in Treasuries and agency mortgage-backed securities.
23 March: The Federal Open Market Committee (FOMC) will purchase Treasury securities and agency mortgage backed securities (MBS) in the amounts needed to support the smooth functioning of the markets and effective transmission of monetary policy to broader financial and economic conditions. The agency MBS purchasing programme is extended to include agency commercial mortgage-backed securities (CMBS) issued by or guaranteed by one of the national mortgage associations (effective 23 March).
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