G7 to deploy all policy tools to combat coronavirus

G7 to deploy all policy tools to combat coronavirus
# 03 March 2020 18:51 (UTC +04:00)

Group of Seven finance officials said on Tuesday they would use all appropriate policy tools to achieve strong, sustainable global growth and safeguard against downside risks posed by the fast-spreading coronavirus, APA reports citing Reuters.

G7 finance ministers were ready to take action, including fiscal measures where appropriate, to aid the response, Japanese Finance Minister Taro Aso told reporters. Central banks would continue to support price stability and economic growth.

“We reaffirmed our commitment to adopt all appropriate policy steps to protect the economy from downside risks posed by the coronavirus, and that we stand ready to cooperate further on timely and effective measures,” Aso said after a G7 call.

He was short on specifics and said the desirable policy response would vary from country to country.

Asked if all appropriate policy steps would include both monetary and fiscal policies, Aso said: “Yes, anything will be included, both monetary and fiscal steps.”

The G7’s united front offset anxiety over the coronavirus’ rapid spread in dozens of countries and aided a recovery in world stocks and oil prices.

“This is a tug of war between hope and fear. Central banks are giving hopes with their potential stimulus,” said Vasu Menon, senior investment strategist at OCBC Bank Wealth Management.

“The question is what they will do? Monetary policy is already very loose and interest rates are very low,” Menon added.

German Finance Minister Olaf Scholz said the G7 had “all means” at its disposal.

“Should the need arise, we have all the means to counter a global downturn,” Scholz said in a statement on Twitter.