The US Federal Reserve has announced it would cut its target interest rate to near zero as part of the emergency action to support the US economy from the impact of the coronavirus pandemic.
In a statement, The Federal Open Market Committee (FOMC) said on Sunday it would cut its baseline interest rate range to 0 to 0.25 per cent and will increase its holdings of Treasury securities by at least USD 500 billion and its holdings of agency mortgage-backed securities by at least USD 200 billion.
"Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 per cent," the statement read.
The committee said it expects to maintain the said target range until "it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals."
The development comes less than two weeks after the US Central Bank had lowered the interest rates by half a percentage point -- a move that then marked the biggest one time cut since 2008.