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In a concerted action the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sveriges Riksbank, and the Swiss National Bank announced reductions in policy interest rates. The Bank of Japan expresses its strong support of these policy actions.
Inflationary pressures have started to moderate in a number of countries, partly reflecting a marked decline in energy and other commodity prices. Inflation expectations are diminishing and remain anchored to price stability, the joint statement says. The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability.
The ECB reduced the minimum bid rate on the main refinancing operations of the Eurosystem by 50 basis points to 3.75 %, with effect from the main refinancing operation to be settled on
The Bank of England's Monetary Policy Committee reduced the official Bank Rate paid on commercial bank reserves to 4.5%.
The Federal Reserve decided to lower its target for the federal funds rate 50 basis points to 1-1/2 percent. The Committee took this action in light of evidence pointing to a weakening of economic activity and a reduction in inflationary pressures. In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 1-3/4 percent.