The Coronavirus outbreak has not just hit China’s national revenue hare but has also impacted business across entire Asia. Tourism and travel have suffered a lot mainly leading to a loss of confidence across the region. This has also resulted in an overgrowing pressure on the Central Banks across the region to curb down the interest rates in order to neutralise the effect Coronavirus is having on national economies. While a few countries have accepted cutting rates as the right way forward, few others are waiting to analyse how long the effect will last and whether a rate cut is actually needed or not.
China has poured in massive liquidity into the market while cutting down the interest rates on Monday in an attempt to stabilize the faltering markets. Indonesia too have indicated that they are ready to take action if the need arises. Philippines, the only other country to report a death from Coronavirus, is also likely to cut down the rates on Thursday. Japan has also indicated that a similar step can be taken as and when needed. Australia however, has maintained that it will wait to analyse how long the effect will last on the economy and then plan their steps accordingly. Thailand, a country where a rate cut was prominently expected, did not do it surprisingly.
Talking of China’s attempts to curb down the effect of Coronavirus on its economy, the People’s Bank Of China has provided a liquidity of USD 173.8 billion (1.2 trillion yuan). The step is a major risk considering the already faltering production sector in China due to the trade war with the United States. The PBoC will also be providing funds to public organisations like hospitals fighting to control the outbreak.