With the coronavirus spreading faster and set to have bigger economic effects than initially assumed, many people are asking how and when central banks will respond. The People’s Bank of China (PBOC) and the central banks of Sri Lanka, Malaysia, the Philippines and Thailand have already cut interest rates, citing the effects of the virus. And even in advanced economies, financial markets have shifted from an assumption of no policy change to pricing in at least some chance of rate cuts since fears about the virus escalated in mid-January.
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