Turkey’s central bank cut borrowing costs by a full percentage point and announced a series of measures to boost liquidity amid the coronavirus outbreak. On the same day, the Central Bank of Poland also made similar moves, following the actions of the Egyptian Central Bank on Monday.

The benchmark rate was cut to 9.75% from 10.75% at an emergency meeting, the central bank said on Tuesday.

The Monetary Policy Committee brought forward its meeting originally scheduled for March 19 to discuss the “potential economic and financial impact” of the coronavirus, the central bank said on its website.

Governor Murat Uysal is mounting a monetary policy response with the outlook for global growth deteriorating and Covid-19 cases in Turkey on the rise. Turkey’s seventh straight rate cut follows a crash in oil prices that can help mitigate its inflation and current-account woes and comes as central banks around the world roll out stimulus measures to counter the pandemic.

Turkey’s central bank also announced a series of measures aimed at containing the economic fallout, easing lenders’ access to lira and foreign-currency liquidity.

Turkey reported 29 new cases of coronavirus Monday, bringing its total to 47. The government took a series of drastic steps, including shutting concert venues, hamams, shisha lounges and theaters and suspending public prayers at mosques.

Apply a series of emergency measures

Policymakers reduced the numbert of foreign exchange lenders must park at the monetary authority, effectively injecting $5.1 billion worth of hard currency and gold into markets.

Additionally, the central bank postponed $7.6 billion of foreign-exchange debt repayments by exporters by another three months, easing the short-term need for dollars in the domestic market.

The bank encouraged lenders to extend credit to companies stricken by the virus spread, pledging cheaper liquidity in return

The monetary authority will provide liras at 8.25% — 1.5 percentage point lower than the benchmark rate — via a three-month repo facility to banks who comply with lending “targets.”

Policy makers will extend as much liquidity as banks need through intraday and overnight standing facilities and may inject funds into the market through repo auctions with maturities of up to 91 days when needed, it said.

The measures announced after the rate decision are “stronger than” a cut in borrowing costs, according to Haluk Burumcekci, the founder of Istanbul-based independent research firm Burumcekci Research and Consulting.

The steps show the central bank will provide a robust funding facility to the banking system in order to ensure credit continues to flow to the real sector, he said. “This will help alleviate the recent tightening in financial conditions and limit the potential slowdown in economic growth.”

Poland lowered interest rates for the first time since 2015 at risk of coronavirus

The Central Bank of Poland also lowered its base rate from 1.5% to 1% on Tuesday to prevent negative effects on the economy from the spread of the coronavirus.

In addition, the Central Bank of this country also lowered the interest rate from 2.5% to 1.5% and the discount rate from 1.75% to 1.05%.

This is Poland’s first interest rate lowering since March 2015.

Recently, Central bank Governor Adam Glapinski said that he predicted interest rates would be unchanged until 2022.

However, last Friday he acknowledged that the Monetary Policy Council will lower borrowing costs to protect the economy from the impact of Covid-19.

As of Tuesday (March 17), Poland announced 221 cases of corona virus infection and 5 deaths. The epidemic has hit financial markets hard and forced authorities to close schools, restaurants, bars and borders.

Egypt suddenly lowered the prime rate to 3% at the emergency meeting

Earlier, in an emergency meeting on (March 16), the Egyptian Central Bank also unexpectedly decided to lower the basic interest rate by 3% and said that this was a “proactive” measure to support the economy. So far, Egypt has had 166 cases of corona virus infection.

The sudden interest rate cut by the Egyptian central bank has increased pressure on debt securities of the country as holders of government bonds continue to sell off in international markets.

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