Azerbaijan, Baku, 9 October/ Trend , A. Badalova/ The Bank of Japan will meet today to pass a decision on interest rates which makes up 4.5% a year at present. On 8 October, largest central banks (Bank of England as well) decided to cut base interest rates in a coordinated way. US Federal Reserve System cut interest rate by 0.5% to 1.5% a year and European Central Bank - to 3.75%.
Coordinated measures can sometimes be more effective because they send a clear signal that policymakers are ready to act together to do whatever is required, Julian Jessop, senior international economist at Capital Economics Ltd, one of the leading UK consulting companies, said to Trend by e-mail.
"The fact that so many central banks have now felt obliged to cut rates aggressively and between scheduled meetings simply underlines how bad market conditions have become," he said.
In spite of urgent cut in rates, markets expect central banks to cut these indicators as well in upcoming meetings.
The only bank maintaining interest rate on the same level, that is 0.5%, is the Bank of Japan.
"The Bank of Japan expressed its strong support for today's moves by other central banks, but conspicuously left rates on hold. This makes sense, as Japanese rates are already at emergency lows of just 0.5%. That said, the fact that Japan failed to move today, reinforces our view that the next move in Japanese rates will eventually be up, although probably not now until 2010 at the earliest," he said.
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