Washington, 9 April 2020 (dpa/MIA) – The US Federal Reserve on Thursday announced another series of sweeping actions to provide up to 2.3 trillion dollars in loans to support the economy amid the fallout from the coronavirus pandemic.
The funding will assist businesses and households and boost the ability of state and local governments to deliver critical services, the central bank said in a news release.
“Our country’s highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus,” Federal Reserve Chairman Jerome Powell said in a statement.
“The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible.”
The Fed released details on its previously-announced Main Street Lending Program, saying it would offer four-year loans to companies with up to 10,000 workers or with revenues of less than 2.5 billion dollars that were financially solid before the crisis.
The programme will “ensure credit flows to small and mid-sized businesses with the purchase of up to $600 billion in loans,” the central bank said.
A municipal liquidity facility will offer 500 billion dollars in lending to states and municipalities as they face sharp declines in revenue and spiking unemployment claims.
The Fed also activated a facility to purchase forgivable loans issued to small businesses under the Paycheck Protection Program, which was created through a 2-trillion-dollar economic stimulus bill signed by US President Donald Trump in March.
The central bank will boost the programme “by supplying liquidity to participating financial institutions.”
The US Treasury Department will support the lending facilities through 195 billion dollars in credit protection.
The Fed has taken unprecedented actions to keep the US economy afloat as the coronavirus pandemic has wreaked havoc on the US and global economies.
It has dropped its benchmark interest rate to near-zero and has rapidly expanded programmes, including buying up assets, in what is effectively quantitative easing.