China cut its interest rate for the third time in six weeks today, and central banks in the United States, Japan and Europe are expected to follow by the end of next week to bolster economies facing recession.
Authorities fear the worst financial crisis in 80 years will usher in a long recession and are looking to rate reductions and other measures to soften the blow.
China increasingly appears to be the world's last center of growth and has said it would not fall victim to the crisis. It cut its interest rate to 6.66 per cent from 6.93.
The Federal Reserve is widely expected to cut US rates today by at least half a point to 1 per cent, the lowest level since June 2004.
Norway's central bank cut rates by 50 basis points to 4.75 per cent, ending more than three years of tightening.
The global rate cut talk buoyed stock markets but analysts said any recovery would be short-lived given that a sharp economic downturn was already in progress.
"Enjoy the party while you can," said David Buik, market commentator at Cantor Index in London.
Reuters