Christine Lagarde says the European Central bank will monitor developments related to the coronavirus and act, 'as necessary and commensurate with the underlying risks. The head of the European Central Bank said yesterday that Europe’s top monetary authority is ready to take “appropriate and targeted measures” if necessary to support the economy against the headwinds from the new coronavirus. That is the case even though some economists think central bank action might only have symbolic value, since lower interest rates cannot re-open businesses that have been closed to prevent the spread of the virus. Lower rates can boost stocks, however, and might be used to prevent turmoil on equity markets from spilling over to the wider economy. The Frankfurt, Germany based central bank for the 19 countries that use the euro has already cut a key benchmark, its deposit rate, into negative territory.

Source: The Standard March 03, 2020 07:07 UTC