The Bank of Canada decided to make a sudden cut in the rates, reducing the central bank’s standard interest rate of 50 points to 0.75%.
The central bank itself already made a cut to its rate to 1.25% at a March 4 meeting to help prevent the impact of COVID-19.
Under usual situations, the bank sets its interest rate every six weeks and only makes an emergency action when there’s a need to do so based on a situation.
The next scheduled decision of the bank’s rate is set on the 15th of April. The bank states that it will give the full information of its viewpoint for Canada’s economy as well as the worldwide economy. The rate of the bank affects the rates that Canadian bank account holders and borrowers receive for their mortgages and savings accounts.
While this unexpected cut took place, Bank of Canada governor Stephen Poloz stated that he does not like the idea of having negative rates. He said that they are not likely to be needed.
The coronavirus pandemic worldwide made Canadians worry about the outcome of the country’s economy when the workers, laborers, and employees are quarantined for the time being, and the trading routes were suspended.