central bank take action, global commodity markets rise


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World central bank rescue the market together again, People's Bank of China suddenly announced, reduce the required reserve ratio (RRR) by 0.5%, the first time in nearly three years. After Wall Street, the six major central banks also inject liquidity into the global financial system, stocks, gold and oil prices soaring kick after the news.
The six major central banks agree to lower the existing U.S. dollar swap rate by 50 basis points, effective next Monday. And agreed to additional bilateral swap agreements, when necessary, the Bank may provide currencies other than the local currency in its own jurisdiction.
In early October 2008 when the financial tsunami, the world's seven major central banks have cut interest rates to rescue the market together; the Federal Reserve, the European Bank and Bank of England Bank and others cut interest rates by 50 basis points, while the People's Bank and Swiss Bank cut interest rates 27 basis points, and 0.25% respectively.
Expert: pain does not heal
Market participants believe that the Bank joint action, provide access to cheaper dollar pipeline, is not the antidote to resolve the debt crisis, but can reduce the market anxiety, this is still an important response to the financial crisis, is expected to reduce the pressure banks sell its assets, to help them against the euro global credit crisis.
Although this action is lift global stock markets, but also reflects the severity of the crisis, forcing the European decision-makers to take decisive action.
Bank of America Merrill Lynch economist Michael Hanson said: "concerted action is very important, has a psychological effect."
However, this action is still not once and for all methods, cannot deal with root of the crisis in Europe: the debt burden for countries such as Spain and Italy too heavy, down debt fears grow. Debt down of one or more States may be overwhelming the whole European economy.
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