Brazil approves quantitative easing to fight coronavirus woes
Brazil’s Congress on Thursday ratified a landmark constitutional amendment allowing the central bank to begin what is expected to be the emerging market world’s biggest quantitative easing programme to fight the economic hardships of the coronavirus pandemic.
The country’s central bank has until now been banned by law from engaging in monetary financing — essentially buying bonds at government debt auctions — but was allowed to purchase them on the secondary market to provide money supply. Under the new measures, the central bank has been granted crisis-fighting powers to buy a range of private and public assets, including government and corporate bonds, to ensure liquidity and shore up an economy expected to shrink 5.3 per cent in 2020.
By Andres Schipani and Bryan Harris via Financial Times