mr funny
03-11-10, 18:58
http://www.straitstimes.com/Invest/Story/STIStory_597400.html
Oct 31, 2010
FINANCIAL QUOTIENT
Huh, what is quantitative easing?
Where do see this?
It can be found in recent reports about the United States' monetary policy.
What does it mean?
The term quantitative easing typically describes a monetary policy used by central banks to increase the supply of money by crediting their own accounts. It is usually practised in situations where the bank interest rate and/or interbank rate is either at or close to zero.
The excess money is then used to buy financial assets, such as government bonds and corporate bonds from banks and other financial institutions to stimulate the economy.
Why is it important?
The main objective of quantitative easing is to push down interest rates. Lower rates tend to stimulate lending, spending and economic expansion. It has been used in the past by countries, including Japan during the early 2000s.
It was an instrument used by the US Federal Reserve last year to keep interest rates low by buying assets from the private sector. Of late, the US Federal Reserve has signalled that it may embark on more quantitative easing, labelled QEII, to support the economy.
Singapore interest rates are influenced by the actions of the US Federal Reserve. With US rates remaining low, we can expect the low interest rate environment here to persist for some time.
So you want to use the term. Just say...
'It was recently reported that the US is close to embarking on a second round of quantitative easing to spur economic growth.'
Lorna Tan
Oct 31, 2010
FINANCIAL QUOTIENT
Huh, what is quantitative easing?
Where do see this?
It can be found in recent reports about the United States' monetary policy.
What does it mean?
The term quantitative easing typically describes a monetary policy used by central banks to increase the supply of money by crediting their own accounts. It is usually practised in situations where the bank interest rate and/or interbank rate is either at or close to zero.
The excess money is then used to buy financial assets, such as government bonds and corporate bonds from banks and other financial institutions to stimulate the economy.
Why is it important?
The main objective of quantitative easing is to push down interest rates. Lower rates tend to stimulate lending, spending and economic expansion. It has been used in the past by countries, including Japan during the early 2000s.
It was an instrument used by the US Federal Reserve last year to keep interest rates low by buying assets from the private sector. Of late, the US Federal Reserve has signalled that it may embark on more quantitative easing, labelled QEII, to support the economy.
Singapore interest rates are influenced by the actions of the US Federal Reserve. With US rates remaining low, we can expect the low interest rate environment here to persist for some time.
So you want to use the term. Just say...
'It was recently reported that the US is close to embarking on a second round of quantitative easing to spur economic growth.'
Lorna Tan