Bank of Canada lowers interest rate to 0.25%
4/21/2009
The Bank of Canada cut its key interest rate by 25bps to 0.25%. According to the central bank the rate can be expected to remain unchanged until Q2 2010. The BoC was clearly more pessimistic about the economic outlook revising down growth expectations to -3% in 2009, and +2.5% in 2010. They predict that the risks to inflation are skewed to the downside and core CPI is unlikely to return to the 2% target until Q3 2011. We will have to wait until Thursday to get more details of any a quantitative easing plan when they release their monetary policy report. The soft outlook and the uncertainty in detail of the quantitative easing have led to notable Canadian Dollar weakness this morning.