Greg Quinn April 21 (Bloomberg)
The Bank of Canada cut its key lending rate to a record low and said it plans to leave it there for more than a year because inflation will remain below its 2 percent target.
The target rate for overnight loans between commercial banks was reduced to 0.25 percent today, the lowest since the central bank was founded in 1934 and the lowest it can go, the bank said. Policy makers also kept the rate on overnight deposits from commercial banks at 0.25 percent, instead of the usual practice that would have reduced it to zero.
“Conditional on the outlook for inflation the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010,” the central bank said in a statement from Ottawa today. The central bank will provide updates at each future policy decision, starting June 4, on its plans to leave the key rate unchanged.
1 comment:
Not very surprising, with all the stimulus money (even though there wasn't that much of it) inflation was inevitable and thus the banks must act and lower their rates to an all time minimum since the inflation is the worst in a long time. I'm a bit surprised they want to keep the rate so low for such a long time. Anyways, thanks for the article,
take care, Elli
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