Bank of Canada Rate Announcement - March 13, 2020
March 13, 2020 | Posted by: Ken Fadel
The BoC has made an unexpected rate cut, cutting it's target rate for the overnight rate another 50 bps to 0.75%. The benchmark rate was cut to 1.25% less than 10 days ago.
'This unscheduled rate decision is a proactive measure taken in light of the negative shocks to Canada's economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices,' the BoC stated.
Normally the BoC schedules interest rate announcements every six weeks, but these are not normal times.
'As we've seen by the rapid-fire moves, you know, we could see another rate cut by the bank,' said Doug Porter, chief economist with the Bank of Montreal.
April 15th is the next scheduled rate decision, at which point the BoC will 'provide a full update of its outlook for the Canadian and global economies.' Current forecasts see the BoC cutting another 50 bps at that meeting, which would see the target rate drop down to 0.25% at level not seen since the Financial Crisis of 2008.