Question

given the present economic situation of the world, what measures are available to you as the govenor of the central bank of your country to protect your country from the fallout of the trade war

Answer 1

The trade war is worsening global competition and growth at the same time. As the governor of the central bank I would try to reduce interest rates so that investment increases which will create new jobs and growth in the economy. Trade is already leading to hike in cost of goods and services, which will increase the inflationary level. So to maintain a stable inflation level, I would try to maintain a steady flow of money supply. Trade war is impacting exports a great deal as every country is enforcing tariffs. One will have to divert those goods for use in the domestic economy, where investment will come into play, as increased investment will lead to increase in spending power.