Canada cuts key interest rate
Canada’s central bank cut its benchmark interest rate by half a point, its biggest reduction since 2001, and signaled further reductions would be needed to offset a slump in exports to the U.S.
The Bank of Canada lowered its target rate for overnight loans between commercial banks to a two-year low of 3.5%. The last time the bank cut its rate by half a point was following the Sept. 11, 2001, terrorist attacks.
“Further monetary stimulus is likely to be required in the near term,” the central bank said Tuesday in a statement from Ottawa. Signs of economic slowdown in Canada are “materializing and, in some respects, intensifying.”
Tumbling exports to the U.S. will limit 2008 economic growth to a seven-year low of 1.8%, the central bank says, and have erased the country’s broad trade surplus for the first time since 1999.
The U.S. Federal Reserve has cut its key rate from 5.25% in August to the current 3% in an effort to help bolster the weakening U.S. economy.
More to Read
Sign up for Essential California
The most important California stories and recommendations in your inbox every morning.
You may occasionally receive promotional content from the Los Angeles Times.