The Bank of Canada (BoC) announced that it is cutting its target for the overnight rate by 0.75% to 1.5% and follows the 0.75% cut in October 2008.
The BoC also reported that they believe the outlook for the global economy has worsened significantly in the past few weeks and will be broader and deeper than previously anticipated. The financial markets continue to strained despite the numerous measures taken by the major governments including the UK, US and the Eurozone which are increasing credit flows, although it will still take a long while for things to return to “normal”.
They also mentioned that core inflation is now less of a risk than it was in the past and that we are now definitely entering a recession as a result of global economic weakness, and people and businesses are now becoming more cautious.
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