The central bank lowered its policy rate Friday by another half a percentage point to 0.25 per cent, adding in a statement that the unscheduled decision brings the benchmark as low as policy makers are willing to take it for now.
The move was necessitated by quickly deteriorating conditions, including a flood of new jobless claims last week.
The Bank of Canada last cut rates to these levels in 2009, during the global financial crisis
The next question is will the banks follow suit and lower their prime rates…
As of March 28 2020:
Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Bank of Montreal have cut their prime lending rates 50 basis points to 2.45 per cent from 2.95 per cent in a move matching the Bank of Canada’s latest interest rate cut.
The prime rate underpins a slate of variable-rate loans, including mortgages, which impacts the cost of borrowing for a range of financial products.
For more information: https://www.bankofcanada.ca/2020/03/press-release-2020-03-27/