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G7 finance, central bank chiefs to hold talks amid outbreak

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March 03, 2020: Finance ministers and central bank chiefs from G7 countries will hold talks Tuesday amid rising global uncertainty over the coronavirus epidemic, the US Treasury said Monday.

US Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell “will lead a call with their G7 counterparts tomorrow morning,” the department confirmed in a statement.

Governments have been scrambling to respond to the outbreak which has now killed more than 3,000 people, including six in the United States, and infected almost 90,000 as it spreads to more and more countries, inflaming fears of widespread economic disruption.

Top finance officials in Europe also tried to calm fears about a damaging economic downturn as a result of the epidemic, as did the continent's central bank.

“We stand ready to take appropriate and targeted measures, as necessary and commensurate with the underlying risks,” European Central Bank chief Christine Lagarde said in a statement.

Britain's Chancellor of the Exchequer Rishi Sunak echoed her comments in a late Monday night statement, saying, “We are well prepared for this global threat and, as the wider economic picture becomes clearer, we stand ready to announce further support where needed.” G7 and eurozone finance ministers will hold conference calls to “coordinate their responses” to the impact of the coronavirus's impact, French Finance Minister Bruno Le Maire announced earlier in the day.

“We will have that meeting by phone — because you need to avoid traveling too much — for the G7 to coordinate its response,” Le Maire said on France 2 television.

A similar meeting of eurozone finance ministers will be held on Wednesday, he said.

“There will be coordinated action,” he said.

The announcement cheered Wall Street, which rebounded from its worst week since 2008, when it dropped 12.4 percent, and the benchmark Dow Jones Industrial Average gained 5.0 percent to 26,706.17.

Markets in London and Paris also rebounded, but Frankfurt closed in the red.

But Banque de France chief Francois Villeroy de Galhau said governments rather than central banks should take action for the moment.

The outbreak has mostly caused disruptions for businesses, which are better addressed with “targeted measures” from governments, he told BFM Business television.

De Galhau said monetary policy already was very accommodative with ample low-rate funds for banks to support firms.

“If we need to do more and we believe that it will be effective, we could do it, but we're not there yet,” he said.

AFP/APP

Posted on: 2020-03-03T09:39:00+05:00

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