Definition of Global Coordinated Interest Rate Cut



What is meant by a "global coordinated interest rate cut"? What is the definition of a "global coordinated interest rate cut"?

A global coordinated interest rate cut occurs when a number of central banks cut their interest rates at the same time.

This is done to confront some sort of shock to the global economy.

Dave explains the meaning of the Global Coordinated Interest Rate Cut when it comes to international economics.For instance, in October of 2008, the Federal Reserve, European Central Bank, Bank of England and others announced that they were cutting their interest rates by a half percentage point (50 basis points) in order to confront the global market turmoil that had been started by the collapse of the subprime mortgage market in the United States.

As mentioned, these cuts are intended to keep the global economy running in the face of some event that has shocked the system, such as the collapse of the US subprime market or perhaps the spread of a virus.

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In the case of the 2008 global rate cut, Canada, Sweden and China also cut their rates at the same time.

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