G7 vows to use ‘all appropriate policy tools’ to combat coronavirus impact

G7 vows to use ‘all appropriate policy tools’ to combat coronavirus impact

The US - the G7 chair this year - said the group's finance ministers and central bank governors would hold a conference call yesterday to discuss measures to deal with the coronavirus outbreak and its economic impact.

Companies worldwide have been buffeted by actions taken by governments to stem the outbreak of coronavirus infections since they emerged in China, where entire cities have been locked down and factories shut.

Fear and uncertainty continue to control Wall Street, and stocks fell sharply Tuesday after an emergency interest-rate cut by the Federal Reserve failed to reassure markets wracked by worries that a fast-spreading virus will cause a recession.

The language of the G7 statement could change as it was still under discussion, the source said.

The market shot higher after the surprise announcement, which was the first time the Fed cut rates outside of a regularly scheduled meeting since the 2008 financial crisis. USA stock index futures are now flat after being higher by about 0.5%. Wall Street was also set to open higher according to futures trading.

Alongside growing health fears, governments are scrambling to calm worries of widespread economic disruptions that saw major stock markets lose over 10 percent of their value last week.

The outbreak has now killed more than 3,100 people and infected over 90,000 as it spreads around the world.

"[The G7 is] just talking about the possibilities and the real of possibility...we've gotten pretty much a boilerplate statement, this is kind of the stuff that you would expect them to so", said Bloomberg News Markets Editor Andrew Cinko in a conversation with BNN Bloomberg.

Finance ministers and central bankers of the G7 issued a joint statement Tuesday pledging to "use all appropriate policy tools" to support the global economy during the spread of the COVID-19 virus.

The Bank of England will "take all necessary steps" to support the United Kingdom economy from coronavirus fallout, said governor Mark Carney ahead of the G7 talks.

Global equities on Monday had rallied sharply as central banks from Japan, the United Kingdom and France followed the lead of the US Federal Reserve in saying they stood ready to support the global economy.

They also welcomed the commitment by the International Monetary Fund, World Bank and other international institutions to help member countries address the human tragedy and economic challenge posed by COVID-19, the medical acronym for the disease.

"There will be coordinated action", said French Finance Minister Bruno Le Maire.

He reiterated that the hotel, restaurant, air transport and event industries were the worst hit sectors in France.

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