Bank of Canada follows U.S. with Interest Rate cut amid Coronavirus concerns

The Bank of Canada announced today it is cutting its key interest rate by half a percentage point to 1.25% down from 1.75% in an effort to soften the economic impact stemming from the novel coronavirus outbreak.

The decision followed right after the U.S. central bank emergency rate cut by 50 basis points to a range of 1% to 1.25% on Tuesday, Mar.3 as an emergency economic measure against COVID-19 concerns.  The bank said in a statement today that the Canadian economy won’t grow as much as previously forecasted for the first quarter of this year and that it took action because COVID-19 has disrupted supply chain reducing commodity prices and the Canadian dollar.

“Global markets are reacting to the spread of the virus by repricing risk across a broad set of assets, making financial conditions less accommodative,” the bank said. “It is likely that as the virus spreads, business and consumer confidence will deteriorate, further depressing activity.

The statement also said the central bank may further adjust its key rate if the situation requires.

Some analysts worry about what the lower cost of borrowing might do to the real estate sector that is already hotter than it was when it peaked in early 2017 in some of Canada’s priciest cities.

The Toronto Regional Real Estate Board reported on Wednesday home sales in February were up 45.6 per cent compared with this time last year, when they hit a decade low. The average price of a home in Toronto climbed to $910,290, up from $779,791 in February last year, the board said. How many people can now afford to buy a house in Toronto?

This content is also available in: Tiếng Việt

Discover

Bài Liên Quan

What make Canadian Icewine special?

When it comes to wine, there are few that are as sweet and risky to make as Ice Wine. As the name...

Asian “Murder hornet” arrived in Canada, U.S., sparking fear and concerns

Amid a pandemic causing millions in North America and Europe to stay inside for their health and safety, a new threat has...

Federal Government Announces Funding of $19 Billion for Safe Restart of Economies in the Provinces and Territories

On Thursday afternoon, Prime Minister Justin Trudeau announced that the federal government, provincial and territorial governments have reached a deal if $19...

Ontario, B.C. and Alberta have declared states of emergency as COVID-19 fears deepen

British Columbia was the third province to declare a state of emergency on Tuesday, March 17, after it has seen 83 additional...

Top Three most Anticipated Movies of 2019

Big Screen 2019 continues to welcome new blockbuster movies invested in both content and budget. Let’s take a look at top 3...

Understanding Your Skin

Dr. Sonya Abdulla is a double-board certified dermatologist in Canada and the United States. Her practice is located in Toronto at Dermatology...

Fighting Back When Health Fails

A Q&A with Dr. Kate Mihevc Edwards Doctor of Physical Therapy (DPT), orthopedic specialist, and CEO and owner...

This content is also available in: Tiếng Việt