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From: Sally Ismail
Mubasher: The drop in interest rates, the most recent wholesale in global markets last week, suggests signs of other movements around the world.
Since the global financial crisis more than 10 years ago, it is incumbent upon everyone to tackle the precarious economic situation of central banks, although other actors can intervene, under the direction of the financial decision-makers.
The global slowdown could bring the major central banks to zero and adopt new growth-enhancing stimulus measures, as was the case after the global financial crisis.
The weakness of industrial activity is a headache at the head of the observers as it sends signs of deterioration of the economic situation; Sinai reiterated publishing disappointing readings of manufacturing PMIs worldwide, month after month.
The IMF insists on the need Quick solutions Addressing negative developments in emerging markets and developing economies, particularly in the light of persistent trade tensions, despite the lull and the difficult risk of oil spills, as well as policy uncertainty.
An badysis of the Dutch investment bank "ING" shows that Central bank marches The world tour in the second half of this year will be calculated according to several rules on a case by case basis.
But at the same time, it is considered a role Other decision makers – Non-monetary policy makers: facing the next economic slowdown, the most important for the moment, a new wave of stimulus will only lead to more political risks, according to the economic vision of Mohammed Al-Arian.
And confirmation of The role that has become binding for central banksA recent study by Nomura (Japan) suggests that major industrial economies (the Group of Ten) G10) Interest rates need to be cut further by 75 basis points because of slowing economic growth and increasing recessionary prospects.
In this context, the approximately 7 central banks around the world Has reduced its policy rate in the last 30 days, while others have suggested that similar measures would be adopted in the near future.
However, attention remains focused on a meeting Fed On July 31, faced with strong expectations of interest rate cuts, the yield curve between long- and short-term Treasuries may encourage other central banks to do the same.
Investors are considering the possibility for the US central bank to reduce interest rates by 25 basis points up to 80% at this meeting, but the interest rate forecast to 50 points of interest base are lower than before.
According to economic writer Noah Smith, the United States can live forever with zero interest as the federal loan increases.
At the same time, the ECB hinted at its recent meeting that there was a monetary stimulus on the road, but took no concrete action, the bank's president, Mario Draghi, having badured that financial policymakers should intervene if the economic situation deteriorates further.
During the last week, he decided International Monetary Fund Reduced its outlook for global economic growth over the next two years and the next by a fourth step in nine months, due to a significant drop in estimates in emerging markets, particularly in Brazil and Mexico.
In a similar context, Bank of America has decided to also reduce its estimates of global GDP growth this year, pointing out that 26 central banks Among the banks it will monitor, it will follow a concessional monetary policy in 2019, including the Fed.
A report by Deutsche Bank shows a downward trend in interest rates around the world, with the shift to a cautious approach from the big central banks, a path that emerging markets will follow.
But the trend towards monetary stimulus is stronger in emerging markets with the spread of trade shocks and a cautious approach by the Fed and the ECB.
It is considered Indian Reserve Bank Leader in the pace of borrowing cost reduction this year after the first interest rate cut in February, with the inflation rate falling well below the target of 4%.
India's interest rate tripled this year to 75 basis points, reaching 5.75%, and is expected to reach 80% for 66 economists polled by Reuters from July 17th to 24th. To be fourth.
In a move, he is the eldest in about 17 years, he played Central Bank of Turkey Under the leadership of his new governor, lowering the key rate by 425 basis points at a time, to 19.75%, but this decision is still not satisfactory for President Recep Tayyip Erdogan.
The bank attributed its decision, the first since 2016, to a moderate recovery in economic activity, to the continuous improvement of inflation expectations and to the recovery of the current account deficit, but the Turkish lira nevertheless made weekly gains.
In a similar and widely anticipated similar movement, he sought refuge Central Russian Federation Reduce interest rates by 25 basis points, to 7.25%, due to inflationary pressures and warnings of a slowdown in economic growth.
These decisions are preceded by a 25 basis point reduction in the interest rate of the second meeting. Central Bank of Australia In order to support economic growth, it has become the lowest level ever reached.
In a move that he spoke for the first time in 3 years, he decided Central Bank of South Korea Reduce the interest rate by 25 basis points to 1.5%, due to growing economic concerns with the Asian country.
With low estimates of economic growth, I accept Central Bank of South Africa Reduce interest rates by 25 basis points to 6.50%.
For the first time in two years, he resorts Central Bank of Indonesia Reduce interest rates by 25 basis points to 5.75% in an attempt to reduce the impact of global trade tensions on the country's economic situation.
But Japan 's monetary policy has been overshadowed by reports that monetary policy makers are divided over the planned announcement this week, that it is a question of launching a program of monetary policy. monetary easing or postpone the decision until later.
In the world's second largest economy, the governor of China's central bank said the country's interest rate was stable and that inflation was stable, stressing that any downgrade would increase the risk of deflation.
In contrast, many are on the waiting list that plan to reduce borrowing costs later, in addition to the Fed and Central India, led by Brazil.
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