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Bank of Canada Slashes Key Rate by 3/4 of a Point


Blog by Shaun Kimmins | December 9th, 2008


The Bank of Canada reduced its key interest rate by 3/4 of a point today.  In its announcement, the Bank stated that Canada's economy is now entering a recession as a result of weakness in global economic activity.  However, the Bank also noted that "money markets and overall credit conditions in Canada are responding to significant and ongoing efforts to provide liquidity to the Canadian financial system."

Please find attached a TD Economics commentary on the Bank of Canada rate decision announced today.  Major banks have cut their prime by 0.50%, bringing it down to 3.50%.

 

This is good news for current variable rate holders.  The article also implies that further cuts may still occur on January 20th at the next Bank of Canada's next scheduled meeting.

 

Pricing for fixed-rate mortgages is not directly affected by today's announcement.

 

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