Thread by @iamSANhedrin

Lets talk about #Global #CentralBanks and their #MonetaryPolicy stances given #COVID19. Specifically, lets ask ourselves: "Can Central Banks Help Fight COVID-19?"

The best place to start is to note that #Global #Growth was already facing considerable downside risks before the #COVID19 outbreak December 2019. The slow down in global growth came on the back of trade (china vs. us) and geopolitical (Brexit etc.) tensions...

To this end, institutions such as the #IMF & #WorldBank revised down their 2020 #Economic #Growth outlook & emphasised the need for a more coordinated #policy approach between #monetary & #fiscal policy around the globe to "rescue" growth from the doldrums...

when the #US & #China agreed on a so called "phase 1" #TradeDeal, things looked up, indeed, markets ticked up on the optimism that downside risks from trade were softening. The worst was yet to come....enter #COVID19...

The rise of the #COVID19 outbreak called for more and decisive action on the global #Policy front. Although Growth was expected to stabilise in 2020-21 after the so called "phase 1" trade deal between the US & China, it was clear that #COVID19 posed a new kind of downside risk...

The significance of the #COVID19 virus was brought to the fore during the 2020 meeting of #G20 finance ministers & central bankers. The G20 officials highlighted that they would be ready to throw everything and the kitchen sink at the virus to stimulate #global #growth

Lets fast forward a bit to actual action taken by #Global #CentralBanks since the #G20 meeting. On March 3rd, the #FED moved to cut its key rate by (in an emergency meeting) and the easing flood gates opened...

As we have come to note, the #US #FED was not done, in another emergency meeting, they cut their key policy rate by 100 basis points. This opened the easing flood gates once again...

From what we have tried to articulate so far, it will be very hard for you to find a single #CentralBank that is not moving in a globally synchronised fashion. Everyone and their mom is cutting rates given this #COVID19 outbreak...

It will also be important to note that the #Global #CentralBanks are not just cutting rates to ease credit extension. They're also engaged in liquidity injection through large scale asset purchases (buying of securities), e.g. ECB (120 billion euro), FED (700 billion US dollars)

Closer to home, the #SouthAfrican #CentralBank holds its second meeting of its #MonetaryPolicyCommittee (MPC) today 17th March 2020. They conclude on the 19th March 2020. What can we expect? A rate cut? most certainly. An injection via some form of QE? Absolutely not...

What is interesting to note is a recent announcement by the #Bank of #Nigeria. The BoN has announced what it calls a "support package" for the #Economy given the #COVID19 outbreak. Specifically, they have created a 50 billion naira ($163 million) fund to combat #CoronaVirus...

In closing, it's clear that #MonetaryPolicy has thrown its conventional & unconventional toolbox at the #Global #Economic #Slowdown. However, #CentralBanks can only do so much. The markets appear not to be responding. What do we have left? #FISCALPOLICY has to come to the party.

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