(Reuters) – Group of Seven nations are drafting a statement on how they plan to soften the global economic hit of the coronavirus but are not yet making specific calls for new government spending or coordinated central bank rate cuts, a G7 official said on Tuesday.
In the statement, expected on Tuesday or Wednesday, the G7 countries will pledge to work together to mitigate the damage to their economies from the fast-spreading epidemic, the official told Reuters on condition of anonymity due to the sensitivity of the matter.
Global financial markets had rallied sharply on Monday as central banks from Japan, Britain and France followed the lead of the U.S. Federal Reserve in saying they stood ready to support the global economy.
The U.S. dollar and Wall Street futures gave up some of their earlier gains after the Reuters report that the statement does not include any immediate calls for fiscal or coordinated monetary stimulus.
The language of the statement could change as it is still under discussion, the source said.
The United States – this year’s G7 chair – said the group’s finance ministers and central bank governors will hold a conference call on Tuesday morning to discuss measures to deal with the epidemic and its economic impact.
Fed Chair Jerome Powell, Bank Japan Governor Haruhiko Kuroda and European Central Bank President Christine Lagarde will also join finance ministers and other G7 central bankers on the call. The virus, which has spread to 60 countries, has killed more than 3,000 people and upended global supply chains.
On Tuesday, Australia’s central bank cut interest rates to record lows in what is expected to be the first in a spate of policy stimulus around the world to fight the economic fallout from the coronavirus.
(By Reuters staff; Editing by Kim Coghill and Sam Holmes)
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