MARKETS SUFFERS FROM VIRUS SPREADS

Early Monday,

Few major Asia-Pacific stock indexes are trading lower as investors continue to assess the economic impact of the global corona-virus pandemic that continues to spread rapidly while further pushing the global economy toward recession.

• Asian shares are also being dragged down by oil prices, which tumbled as fears mounted that the global shutdown for the corona-virus could last for months, doing untold harm to economies.

• There is room for further interest rate cuts, but they will not be reduced to zero or into negative territory, Taiwan central bank governor Yang Chin-long told parliament on Monday.

• Bank of Japan on Monday reiterated its stance that it was ready to relax some requirements financial institutions must meet to participate in its market operations.

Last week

• The Asian markets were primarily supported by positive developments in the United States – namely unlimited monetary policy aid from the Federal Reserve and a $2.2 trillion fiscal aid package from the U.S. government. This seemed to bring hope to investors on the other side of the Pacific, but early Monday that hope is being crushed by the alarming rise in the number of U.S. corona-virus cases.

• British authorities warned over the weekend that lock-down measures could last months. President Trump, who talked about reopening the U.S. economy for Easter, on Sunday extended guidelines for social restrictions to April 30.

• India on Thursday announced a 1.7 trillion rupees ($22.6 billion) economic stimulus plan that will be released through direct cash transfers and food security measures aimed at giving relief to millions of poor hit by the nationwide lock-down.

• The RBI, cut the repo rate and reserve repo rate by 75 basis points and 90 bps, respectively (100 basis points/bps = 1 per cent). The repo rate now stands at 4.4 per cent and reserve repo rate at 4 per cent. The apex bank last cut rates in its October 2019 monetary policy review. This monetary policy review of the RBI was rescheduled in wake of pandemic which originally scheduled to take place on March 31, 2020 and April 3, 2020.