Sweden, New Zealand cut rates, Japanese exports weak
Sweden and New Zealand responded to the global financial crisis by cutting interest rates on Thursday and weak Japanese exports underlined the risk of a deep recession.
Investor flight from emerging economies, a number of which looked set to seek help from the International Monetary Fund (IMF), compounded market nerves.
Sweden, which joined the U.S. Federal Reserve and others in a coordinated round of cuts two weeks ago, lowered its key interest rate by 50 basis points and signaled more to come.
New Zealand cut rates by a record one percentage point and also said more reductions were in the pipeline.
Bank of England Governor Mervyn King said Britain too was ready to lower interest rates again after warning this week the country was probably entering its first recession in 16 years cash advance flexible payments.
Central banks around the world are trying to limit the economic damage from the worst financial crisis since the Great Depression of the 1930s.
“The interest rate cuts are aimed at alleviating the effects of the financial crisis on the real economy,” Sweden’s Riksbank said in a statement.
Many economists say the effects on business of the financial crisis set off by a U.S. housing market collapse 15 months ago are only now starting to show, even as credit flows start to unfreeze as banks begin lending to each other again.
Filed under: management by Specialist