Economies around the world were affected dramatically by the global coronavirus outbreak. Therefore, governments and central banks around the globe were forced to implement ground-breaking fiscal and monetary stimulus to support the economies.
The United States
The Federal Open Market Committee held two emergency meetings on March 3 and March 15. During the first meeting, the US policymakers decided to lower the Federal Funds Rate to the target range of 1.00% to 1.25%. As the result of the second gathering, the rate was cut to the target range of 0.00% to 0.25%.
Moreover, the Fed promised $700B in quantitative easing (QE) programme. However, on March 23, the US policymakers pledged unlimited QE, involving purchases of corporate and municipal bonds.
On March 31, the Fed allowed dozens of foreign central banks to access the domestic currency by permitting them to exchange the US Treasury securities holdings for overnight Dollar loans. The programme started on April 6 and is expected to last for at least half a year.
On March 27, the US House of Representatives passed the most massive aid package in the history equal $2.2T. The package includes a $500B fund to help most affected industries and $3000M cash to families.
On March 12, the European Central Bank decided to adjust some of the key parameters of the third series of targeted longer-term refinancing operations (TLTRO III) to support liquidity conditions and money market operations. The Bank cut the interest rate on TLTROs to -0.75%. Moreover, it added €120B to its present asset-purchase programme (APP) of €20B per month.
On March 17, the ECB announced that it would launch €750B Pandemic Emergency Purchase Programme (PEPP). According to the official release: "PEPP is a new temporary asset purchase programme of private and public sector securities to counter the serious risks to the monetary policy transmission mechanism and the outlook for the euro area posed by the outbreak and escalating diffusion of the coronavirus, COVID-19."
On April 7, the ECB introduced a package of temporary collateral easing measures to support liquidity conditions and credit to the economy. The Bank decided to ease conditions for the use of credit claims as collateral.
On March 23, the German government guaranteed a €750B package to support companies. Also, the government promised a €100B credit to public-sector development bank KfW for loans to hard-hit businesses and a €400B credit to secure corporate debt at risk of defaulting.
On March 16, the French government pledged a €45B fund to support companies and workers, as well as promised around €300B to corporate borrowing from commercial banks.
On March 16, the Italian government contributed €25B to suspend loan and mortgage repayments for companies and families, as well as help firms to pay workers who are temporarily unemployed.
On March 17, Spain pledged a €200B package as credit guarantees for companies, as well as support for suffering people. On March 31, the Spanish government approved €700M fund aid to support hard-hit households.
The United Kingdom
The Bank of England held two emergency meetings on March 11 and March 19. During the first meeting, the Monetary Policy Committee decided to lower the Official Bank Rate to 0.25%. As the result of the second gathering, the rate was cut to 0.10%.
Moreover, the Bank implemented a new policy for cheap credit, as well as lowered a credit buffer to support lending. Additionally, it promised to buy commercial papers with a maturity of up to 12 months from businesses that had a pre-crisis investment-grade credit rating.
On April 2, the Bank of England announced it would expand its corporate bond purchase programme to at least £20B.
On March 11, the UK government introduced a £30B stimulus plan, as well as promised £330B loan guarantees to companies. Also, the government proposed to pay 80% of monthly wages (up to £2,500) to temporarily unemployed workers. Additionally, businesses are now allowed to pay VAT taxes later.
The Bank of Canada lowered its Overnight Rate three times during emergency meetings. On March 27, at the third meeting, the Canadian policymakers cut the rate to 0.25%.
Additionally, the Bank decided to purchase government securities in the secondary market. It is buying C$5B worth securities per week.
The Bank of Canada introduced C$150B insured mortgage purchase programme and C$10B credit support programme for businesses.
The Canadian government would pay up to 75% of monthly wages to workers employed by small and medium-sized companies. Moreover, the government guaranteed C$55B suspension for businesses and households and C$27B fund to help workers and low-income families.
The Bank of Japan eased its monetary policy by starting purchases of exchange-traded funds (ETFs) and other unsafe assets, such as corporate bonds. Also, the Bank decided to extend one-year zero-rate loans to financial institutions.
On March 10, the Japanese government revealed ¥430.8B extra spending to subsidise small and medium-sized businesses, improve medical facilities and support working parents forced to take a vacation.
On April 7, the government accepted a stimulus package equal to 20% of economic output, which equals around ¥108T.
The Reserve Bank of Australia cut the interest rate two times: on March 3 and March 19. The Cash Rate now equals to 0.25%. Also, the Bank launched A$15B purchase programme of residential mortgage-backed and other asset-backed securities and A$715M support programme for airlines.
The Australian government pledged A$66.1B for enterprises and additional welfare payments, A$17.6B to subsidise small businesses, pensioners, students and others, as well as A$130B to pay wages to around 6M people.