The Bank of Canada became the first central bank in the Group of Seven to cut interest rates in response to plummeting oil prices, saying the shock will weigh on everything from inflation to business spending.
Governor Stephen Poloz called the cut ‘insurance’ against low oil prices. Here are the bank’s top messages on how the oil rout could impact the economy
The bank cut its rate on overnight loans between commercial banks by a quarter point to 0.75%, a decision none of the 22 economists in a Bloomberg News survey predicted. The rate, which influences car loans and other lending rates across the economy, had been at 1% since September 2010, and was last cut in April 2009.
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