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(CEP News) - As some of the world's major central banks cut rates by 50 basis points in a co-ordinated effort on Wednesday, the Bank of Japan cheered its fellow policy-makers on, but said it was unable to follow.
"In Japan, policy interest rates are very low and the monetary conditions remain accommodative. On top of that, the Bank has engaged itself in decisive actions of liquidity supply, ranging from the uninterrupted provision of ample yen liquidity in the market to the introduction of US dollar liquidity operations," the bank said in a statement. "Against this background, Japan's financial market has been stable in comparison with those in other industrialized countries." The benchmark rate in Japan is among the lowest in the world sitting at 0.50%. Earlier on Wednesday, major world central banks announced co-ordinated interest rate cuts early Wednesday morning. Among them, the Federal Reserve and the European Central Bank cut rates 50 basis points, bringing their rates to 1.50% and 3.75% respectively. The Bank of Canada also cut rates 50 basis points to 2.50%. The Bank of England, Swiss National Bank and Sveriges Riksbank also participated in the rate reductions, reducing their key overnight lending rates by 50bp. "Throughout the current financial crisis, central banks have engaged in continuous close consultation and have cooperated in unprecedented joint actions such as the provision of liquidity to reduce strains in financial markets," said a joint statement released by the banks. "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 statement continued. "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." By Erik Kevin Franco,
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, edited by Stephen Huebl,
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