In previous years, international banks have tended to reduce interest rates until the interest rates are brought to zero and negative in some countries.
In 2019, more than 30 central banks around the world lowered interest rates, especially the Arab countries such as Egypt, Saudi Arabia, and the United Arab Emirates. In contrast, a few enemy countries raised interest rates and the world’s 2023 orientation became to reduce interest rates and in a corresponding step from the Federal Reserve Bank to reduce interest rates suddenly from the bank expects in the coming months to decrease interest rates in all countries of the world.
The interest rate in the United States of America is the main reference for the whole world and the fact that the dollar is the dominant currency in the world and most of the economies are pegged to the US dollar and works to put pressure on the US federal.
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Economic Recession
There are many innovations and new industries every day and this provides the size of the economy as a whole and the economic recession works on a significant decrease in economic activity and a drop from top to bottom and works to slow production and does not increase and that the economy if the recession is heading leads to high unemployment rates and companies announce bankruptcy and factories are closed And the employees are laid off, and the salaries are reduced, and at this time all people are affected in general and lead to many crimes and thefts, and the declining levels of education, health, services, and the like.
Why Countries Fear Recession
In 2019, the main fear was the trade war between the United States of America and China, and this worked on violent tremors in the global economy, and in 2023 the main fear became Coronavirus because it caused losses to billions and the second-largest economy in the world were achieved which is China and usually the world depends on China because It is the means for everything that enters the industry from the ground up.
And customer borrowing for money for investment is very cheap and from this standpoint, projects are opened with little interest from the bank and this works to employ new employees and pay taxes and from here works to increase the wheel of economic activity and the wheel of the production revolves from the second and as a person who surrounds his money in the bank only by keeping the money in the bank without benefit from them, and this deals with researching other investment methods. The first thing that can be gone is the stock exchange, and this is in countries that support the economies of countries and companies that are restricted so that they can provide capital and expand their operations, and this means increased economic activity.
Low-Interest Rates
Low-interest rates are a curse for the whole global economy, and this means that money is cheap in banks, easy to borrow, invest, and buy goods. This works to increase loans and levels of debt increase. This increases the value of debts that amount to 188 trillion dollars. If there is an effect, the banking system collapses, because banks lent money to people. And the fees are less and there are no deposits. This means the fall of the financial system, as happened in 2008-2009. This means that it is fraught with risks as the patient and the doctor.
Also read: The Most Important Ways to Avoid the Financial Crisis
