CBJ — The Bank of Canada has lowered its key overnight trendsetting rate by half a percentage point to 0.25%.  It was an unscheduled rate announcement in response to the ongoing COIVD-19 pandemic.

The move by the central bank is a clear sign that the government wants the banks to follow suit and lower their interest rates, including credit cards.

The rate drop is also due to a drastic decline in oil prices and comes at a time when the Canadian dollar languishes in and around 69 cents U.S.

The Bank’s rate is now at a level  it refers to as “its effective lower bound” — or the lowest level that rates can be set.

The 0.25% rate effectively matches the move made earlier this month by the U.S. Federal Reserve.

@CanBizJournal