The central bank indicated its readiness to cut interest rates further if necessary to support the economy.
(Photo: AFP)
Ottawa Canada’s central bank is following suit, following major interest rate cuts in the wake of the virus crisis in the US. It lowered the key monetary policy rate by half a point to 1.25 percent on Wednesday. Monetary officials called the coronovirus an outbreak of a “significant negative setback” with an economic outlook.
This is likely to lead to further deterioration in the business environment and consumer sentiment, which worsens the economic outlook. At the same time, the central bank expressed a desire to further lower interest rates if necessary to support the economy.
The US Federal Reserve on Tuesday surprisingly lowered its key interest rate by half a point from 1.0 to 1.25 percent. The move was justified with the risk to the US economy associated with the spread of the virus.
Finance ministers and central bank heads of the seven major industrialized countries (G7) agreed to their approach to the crisis, calling the conference without any concrete decision. According to Japan’s Finance Minister Taro Aso, monetary policy responses or high expenditures by states are possible. Ultimately, the group of seven countries — Germany, France, Italy, Great Britain, Japan, the United States, and Canada — is likely to differ from country to country.
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