Source: Reuters

New Zealand and Sweden cut interest rates on Thursday in response to the financial crisis and weak Japanese exports added to fears of global recession.

Investor flight from emerging economies, a number of which looked set to seek help from the International Monetary Fund, compounded market nerves.

Sweden, which joined the U.S. Federal Reserve and others in a coordinated round of cuts two weeks ago, lowered its key interest rate by 50 basis points and signaled more to come.

New Zealand cut rates by a record one percentage point and also said more reductions were in the pipeline.

Central banks around the world are trying to limit the damage from the worst financial crisis since the Great Depression of the 1930s.

“The interest rate cuts are aimed at alleviating the effects of the financial crisis on the real economy,” Sweden’s Riksbank said in a statement.

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