Some of the major central banks around the world have today cut interest rates in an effort to dampen the fires that have taken hold in global financial markets.
The ECB, the US Fed and the Bank of England have all announced the rate cut of 50 basis points (0.5%) while Hong Kong cut it’s rates by a full 100 basis points.
Other central banks are expected to follow suit.
It is hoped the move will prevent a long and painful recession amid a growing global financial crisis.
Tags: Bank of England, banking crisis, Dollar, ECB, Euro, European central bank, Fed, interest rates, NYSE, pound, Sterling, Travel, US fed, Wall Street
October 8, 2008 at 1:20 pm |
[...] on the FX market this morning. In forex trading, the sterling is inching upward as the effects of a global interest rate cut help support the British [...]
October 8, 2008 at 5:09 pm |
It is a pity they didn’t all go further. A unified approach makes sense, because it means no single country steals an advantage, but if they could have put this type of deal together, why not 2% or more, it is what the money markets are looking for and without them, helping the banks is a pointless exercise!
October 8, 2008 at 9:03 pm |
Yes UK Voter, I agree. But I think getting them first to coordinate a unified approach is an achievement and bigger moves will come. they will eventually make the necessary big moves. better to see them cutting interest rates to drive the whole market than propping up individual failed institutions
October 9, 2008 at 8:09 am |
True, but many so called experts have said that unless large interest rate cuts go hand in hand with the bailout, the money markets, which are separate from the banks, will not move back in. I am no expert, but there does seem some logic to this argument, but as you say, a coordinated approach is a good idea, given it should minimise the chanes of a run on specific currencies.