MANILA – Central banks should take advantage of low inflation to “print lots of money” to support their economies as governments around the world implement lockdowns to check the spread of COVID-19, an analyst said on Tuesday.
The risk of sparking hyperinflation, similar to what happened in Zimbabwe and Argentina is very low right now, according to Jeffrey Halley, senior market analyst at currency trader OANDA.
“It's actually not a bad time to do it because we basically have zero to no inflation in the world,” Halley said in an interview with ANC.
"There’s never been a better time for governments to go and print lots of money and throw it at the economy."
Halley said small businesses could benefit from central banks “directly giving money” to businesses because firms are more concerned about cash flow rather than interest rates.
“Small businesses don’t care what their borrowing costs are. They care about having enough money to pay their staff and their invoices at the end of the month.”
He said that some of the major world economies might be in for a “hard landing” despite the stimulus programs they have announced.
“I think what we really have to understand here is that these stimulus packages are here to keep the lights on in the global economy they’re not there to be a magic panacea that turns that ship around and immediately starts growth up again.”