The Bank of Canada has announced a half-percentage point cut to its trendsetting interest rate amid economic concerns stemming from the novel coronavirus outbreak.
The Bank of Canada is cutting its key interest rate target by half a percentage point, dropping it to 1.25 per cent in response to the economic shock from the novel coronavirus outbreak.
The central bank says its target for the overnight rate is being trimmed because COVID-19, the disease caused by the virus, “is a material negative shock” to the country’s economic outlook.
In a written statement about the announcement, the bank said that prior to the outbreak, Canada’s economy had been operating “close to potential with inflation on target.”
“However, COVID-19 represents a significant health threat to people in a growing number of countries. In consequence, business activity in some regions has fallen sharply and supply chains have been disrupted. This has pulled down commodity prices and the Canadian