LONDON - The Bank of England increased its bond-buying program by 100 billion pounds ($125 billion) on Thursday as it sought to help steer the economy away from a record slump in March and April caused by the coronavirus lockdown.
The BoE kept its benchmark interest rate at 0.1%.
Eight members of the nine-strong Monetary Policy Committee voted to increase the bond purchase program while BoE Chief Economist Andy Haldane voted for no increase.
All nine members voted to keep Bank Rate unchanged.
The central bank said it would spend all the extra 100 billion on government bonds but would slow the pace of its purchases, saying it expected the new total 745 billion-pound target would be hit by the end of the year.
A Reuters poll of economists had pointed to a 100 billion-pound increase in the asset purchase program and Bank Rate remaining at 0.1%.
The BoE is using its bond-buying program as its main policy tool as it tries to help steer Britain's economy away from a record 25% slump in March and April.
There was no mention of the negative interest rates - an option the central bank has said it will consider - in the minutes of the BoE's policy meeting.
($1 = 0.7981 pounds) (Reporting by William Schomberg, editing by David Milliken)
-reuters-
JAKARTA - Indonesia's central bank on Thursday cut interest rates for the third time this year and scaled back its growth projections as the global pandemic batters Southeast Asia's biggest economy.
Policymakers at Bank Indonesia reduced the key lending rate by 25 basis points to 4.25 percent, while lowering their full-year economic growth forecast to between 0.9-1.9 percent, from a previous 2.3 percent.
The move comes days after the government warned of a 3.1 percent contraction in the second quarter -- the latest in a series of downward revisions.
Central bank governor Perry Warjiyo signaled there was "still room" to cut rates further in the coming months, but added that he expected growth to rebound next year.
"This (rate) decision is consistent with efforts to maintain stability and boost the economy during the COVID-19 era," he said Thursday.
Indonesia has announced a stimulus package worth some $48 billion to help offset the impact of coronavirus, which forced a wide-scale shutdown that hammered growth, including in the key tourism sector.
"We expect further gradual easing over the coming months," research house Capital Economics said, citing a "very poor outlook" for the economy.
"Virus containment measures are having a huge impact on the economy," it added.
This month, the Southeast Asian archipelago, home to nearly 270 million people, said it was rolling out a "new normal" policy that included gradually easing movement restrictions in a bid to head off economic collapse.
But Indonesia's infections are mounting with cases topping 40,000 on Wednesday, surging beyond neighboring Singapore to mark the region's highest.
The country has also recorded 2,276 deaths. But with one of the world's lowest testing rates, the true scale of the public health crisis is widely believed to be much bigger.
Agence France-Presse
LONDON - Global equities shot higher Tuesday after the US Federal Reserve launched a massive stimulus program to support businesses hit by the virus lockdown, offsetting fears about a possible second wave of infections.
The stocks rally was rooted also in reports that US President Donald Trump is considering a $1.0-trillion infrastructure investment package.
Tuesday's gains helped wipe out some of the heavy losses suffered Monday caused by new virus cases around the world -- including in Beijing, Florida, Texas and Tokyo.
Investors were taking heart from easing lockdowns, with several European countries re-opening their borders and British shops trading again.
But the main driver of the gains was the Fed's Main Street Lending Program and an emergency lifeline under which the Fed will buy up to $750 billion in corporate bonds.
The Fed announcement saw all three main indexes on Wall Street finish higher Monday, and the positivity filtered through to Asia and Europe.
Tokyo's main stocks index had shot up almost five percent by its close Tuesday, winning an extra boost from a Bank of Japan move to ramp up aid for firms struggling with virus fallout.
Seoul surged more than five percent and Sydney almost four percent, while Hong Kong jumped 2.4 percent and Shanghai more than one percent.
Europe also fizzed higher, with Frankfurt soaring 3.2 percent by the half-way stage, Paris winning 2.6 percent and London adding 2.4 percent in value.
"The formal start of the Fed's corporate bond-buying program boosted global sentiment," said City Index analyst Fiona Cincotta.
"Adding to the seemingly addictive stimulus high, the Trump administration is weighing up a $1 trillion infrastructure spend to spur on the economy in the wake of the coronavirus crisis."
The Fed had in recent weeks stated that it was on the verge of rolling out the Main Street scheme, but held off as it expanded the criteria to reach more struggling companies.
The plan is part of a massive financial backstop put in place by the bank to protect the economy from the worst of the virus crisis. The government has also pledged trillions of dollars in stimulus support.
The US Chamber of Commerce called it "a lifeline for businesses that have been disrupted by the health and economic consequences of COVID-19".
Fed boss Jerome Powell was meanwhile to give two days of congressional testimony, starting Tuesday.
He caused ructions on markets last week with a sobering warning about the economic outlook.
Agence France-Presse
MANILA – Central banks should take advantage of low inflation to “print lots of money” to support their economies as governments around the world implement lockdowns to check the spread of COVID-19, an analyst said on Tuesday.
The risk of sparking hyperinflation, similar to what happened in Zimbabwe and Argentina is very low right now, according to Jeffrey Halley, senior market analyst at currency trader OANDA.
“It's actually not a bad time to do it because we basically have zero to no inflation in the world,” Halley said in an interview with ANC.
"There’s never been a better time for governments to go and print lots of money and throw it at the economy."
Halley said small businesses could benefit from central banks “directly giving money” to businesses because firms are more concerned about cash flow rather than interest rates.
“Small businesses don’t care what their borrowing costs are. They care about having enough money to pay their staff and their invoices at the end of the month.”
He said that some of the major world economies might be in for a “hard landing” despite the stimulus programs they have announced.
“I think what we really have to understand here is that these stimulus packages are here to keep the lights on in the global economy they’re not there to be a magic panacea that turns that ship around and immediately starts growth up again.”
source: news.abs-cbn.com
