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Bank of Canada chops borrowing costs to 50-year low, ]1 x% m" V2 B
Last Updated: Tuesday, December 9, 2008 | 9:28 AM ET Comments80Recommend83( W6 j1 V/ Z, p/ P3 s$ o5 A$ x
CBC News! p, ?" P7 r6 c6 m
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The Bank of Canada chopped a key interest rate by three-quarters of a percentage point on Tuesday as the central bank moves to combat economic weakness." M! r, _. u( i, t9 R2 B
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With the interest rate reduction — which was the biggest drop since one of a similar size in October 2001— the bank's overnight rate now stands at 1.5 per cent, a level not seen since 1958.
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"While Canada's economy evolved largely as expected during the summer and early autumn, it is now entering a recession as a result of the weakness in global economic activity," the bank said.
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"The recent declines in terms of trade, real income growth, and confidence are prompting more cautious behaviour by households and businesses."/ f. K3 h6 j. V' Z
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Economists had been divided over whether the central bank would cut by one-half of a percentage point or go with a more aggressive reduction.3 X& c0 ~1 ?: d$ @/ ?* }. G
* O1 O9 @9 \+ ]3 y( t4 L/ Q0 H6 X2 cIn the wake of the Bank of Canada's decision, the Canadian dollar was trading down 0.93 of a cent to 78.81 cents US. |
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