As part of the interventionist, lenient monetary policy as part of anti-crisis measures to maintain liquidity in the financial system in connection with the current economic crisis, several central banks have already significantly reduced interest rates. Among these central banks were, for example, the European Central Bank and the Federal Reserve Bank. If the global economic crisis, including the high recession of the global economy, were to persist for the next few months, it cannot be excluded that other, subsequent central banks may also significantly lower interest rates. The reduction of interest rates increases liquidity in the financial system and contributes to a decrease in interest on credit and para-credit products offered to commercial entities and citizens by commercial banks. It is one of the most important instruments for activating entrepreneurship as part of monetary policy. In addition, as part of a gentle, pro-development monetary policy, central banks are lowering interest rates, giving a signal to commercial banks that they are taking action to activate liquidity in the banking system. Commercial banks also reduce the interest rate on credit and para-credit products at the expense of lower profitability and increase the potential liquidity in the banking system. On the other hand, to what extent lending will develop and thus counteract the deepening economic downturn, it also depends to a large extent on the other side of the credit transaction market, i.e. primarily from enterprises taking out business loans to finance new business ventures or maintain business continuity in situations of specific financial problems. Therefore, the state through central banks can activate lending of commercial banks, which are an important element of the so-called interventionist credit policy. If the interventionist credit policy effectively fulfills its role, it is a significant element of anti-crisis measures taken in the financial system and thus measures significantly reducing the risk of losing liquidity in financial institutions. However, in order for this easing of monetary policy not to increase the risk of future financial crisis, it is also necessary to constantly and permanently improve the process of managing credit, operational, liquidity, IT systems, cybercrime, etc. In addition, as part of the above mentioned mild, interventionist monetary policy, central banks launch loans for commercial banks on preferential terms, buy lost loans from commercial banks and / or carry out buy-back programs on the secondary market of government bonds to maintain liquidity in the commercial and public financial system of the state. In addition, in some countries, interventionist measures of anti-crisis budget policy, including fiscal ones, were launched in parallel. In connection with this, some countries have already launched simultaneous, pro-development, interventionist, anti-crisis programs to save business entities from mass bankruptcy by introducing additional temporary tax breaks or exemptions, subsidies to employees' remuneration under fiscal policy. As the global economy is currently in a deep recession, it is necessary to permanently improve and increase the scale of anti-crisis socio-economic policy planned, developed and implemented both on the scale of individual countries and as part of coordinated international activities. If the recession of the global economy lasts for several weeks or months, then similar anti-crisis measures may be taken in other countries. I conduct research in this area. The conclusions of the research I published in scientific publications that are available on the Research Gate portal. I invite you to cooperation.

Have a nice day, Regards,

Dariusz Prokopowicz

Asian Central Banks may be facing liquidity crisis due to COVID 19.

This policy tracker summarizes the key economic responses governments are taking to limit the human and economic impact of the COVID-19 pandemic. The tracker includes 193 economies. Last updated May 1, 2020.

The interest rate will decline in fixed deposits as most governments will try to force people to spend or invest in other investments linked to equity and debentures.

Dariusz Prokopowicz Thank you for your broad explanation since the pandemic does require monetary policy intervention to control liquidity. I still want to explore more about the topic especially the pandemic's impact on the debt securities market. Would you kindly share the link to your research that you mention at the end of your answer? Thank you