The coronavirus is getting worse in mainland China.
The death toll reached 361 and the total number of people infected with the virus surged to 17,328.
As expected, the stock markets crashed on the first day back from the prolonged Lunar New Year holiday. Mainland China’s main share benchmark, the Shanghai Composite index, cratered close to eight percent. The Shenzhen Composite crashed nearly nine percent. The Chinese yuan also plunged against all major currency competitors – the USD/CNY currency pair fell below the crucial 7 threshold.
Officials are springing into action to limit the economic damage from the Wuhan coronavirus.
On Sunday, the People’s Bank of China (PBoC) announced it will inject $174 billion into the economy to cushion equities. This is roughly $100 billion more than the same time a year ago.
It is estimated that about $150 billion in reverse repos will mature this week. If accurate, there will be approximately $50 billion in net cash in the repos.
This is just one of 30 other stimulus measures the central bank will take to ensure the economy will stabilize.
The central bank is also encouraging financial institutions to boost lending, avoid calling in debts in areas that are significantly affected by the coronavirus, and limit large gathering at companies (rotating shifts or telecommuting).
Would you say now is the time to panic?
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