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By Evan Ryser
WASHINGTON (MNI) - Finance ministers and central bank governors from the
Group of Seven nations said Tuesday they are monitoring the spread of the
coronavirus and stand ready to cooperate further to safeguard the global
economy, passing on a chance for action now that some investors were seeking.
"Given the potential impacts of COVID-19 on global growth, we reaffirm our
commitment to use all appropriate policy tools to achieve strong, sustainable
growth and safeguard against downside risks," the group said following a special
morning conference call.
The statement stopped short of stating specific actions countries might
take in response to the virus. U.S. Treasury Secretary Steven Mnuchin and
Federal Reserve Chair Jerome Powell led the call which included officials from
Canada, the U.K., France, Germany, Italy, and Japan.
"G7 central banks will continue to fulfill their mandates, thus supporting
price stability and economic growth while maintaining the resilience of the
financial system," the statement said. "G7 Finance Ministers and Central Bank
Governors stand ready to cooperate further on timely and effective measures."
The OECD on Monday, calling on governments to act "swiftly and forcefully,"
lowered its central growth forecast from 2.9% to 2.4% but said a "longer-lasting
and more intensive coronavirus outbreak" could slash growth to 1.5% in 2020.
The Reserve Bank of Australia on Tuesday cut its key rate by 25 bps to
0.5%, promising to ease further to support growth if needed. The Bank also
pointed to indications of help from the Australian government for the areas of
the economy hardest hit by the virus outbreak.
The Bank of Canada is also expected to cut the G7's highest interest rate
of 1.75% on Wednesday due to coronavirus damage to the global economy that
threatens a domestic slowdown.
The International Monetary Fund and World Bank Group issued a joint
statement Monday, saying they will "use our available instruments to the fullest
extent possible, including emergency financing, policy advice, and technical
That followed statements from Powell, BOJ Governor Haruhiko Kuroda, ECB
President Christine Lagarde and the Bank of England. While the BOJ offered to
supply ample liquidity and stabilize the financial markets, the Fed, ECB and BOE
offered to act as needed, offering confidence that helped steady global
financial markets Monday.
--MNI Washington Bureau; +1 202 371 2121; email: email@example.com