It appears stimulus packages are on everyone’s mind as countries try to support their economies and shrug off some of the damage caused by the interruptions in China that the coronavirus epidemic brought about.
After Singapore and Thailand revealed their own ambitious stimulus plans earlier this week, and after several hints from Chinese officials, today China also shared more details about its plans to contain the damage done to the economy.
The government will exempt employers from making payments towards pension funds, welfare, and insurance programs until April or June, depending on the region and company size.
In total, Chinese businesses will be spared some $71 billion of payments they would normally have to make. The government will make those contributions on behalf of employers in the meantime to keep health insurance, social welfare, and pensions running smoothly.
Moreover, the People’s Bank of China is also taking measures to loosen its monetary policy. Their latest move was to lower the loan prime rate by 10 points. The Chinese yuan welcomed the news and appreciated in value, reaching 7.0161 versus the US dollar.
Today the financial markets were also a little surprised to find out that the unemployment rate in Australia grew to 5.3%, which weakened the Australian dollar.
Later in the afternoon investors are awaiting the minutes from the January policy meeting of the European Central Bank, which would hopefully offer guidance as to what the ECB plans to do to boost the eurozone’s economy. The euro today continued to decline against the US dollar.
