Lots of economic news today as international governments are attempting to move quickly to try and reduce the severity of the global economic crisis.
- The US annouced a $17.4B loan package for American car markers that will come out of the $700B Troubled Asset Relief (TARP) programme that was set up to help the banking industry
- GM and Chrysler are expected to access the money immediately, and the loans will be called back if they can’t prove their business are still viable by March 31
- Central banks around the worled said they would keep adding money into the financial system as the U.S., British, Swiss, and European central banks will extend money market programmes in coming months
- The Bank of Japan’s lowered its key policy rate to 0.10% from 0.30% and follows the US Federal Reserve’s dramatic rate cut to almost 0% earlier in the week
The Bank of Canada’s next interest rate announcement is on Jan 20th and if things keep getting worse at this pace, it seems like they will be forced to cut interest rates again, thereby, giving variable rate mortgage holders another cut in their monthly payments – if the banks pass on the savings.