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OTTAWA - The Bank of Canada has taken its influential target interest rate to the lowest practical level in an effort to combat what it says is deeper and more widespread global recession.
The central bank sliced the overnight rate in half to 0.25 per cent - the lowest it says is practical - and signalled strongly it will have to keep it there until at least mid-2010.
In addition, the bank has extended the term of its purchase and resale agreements it uses to inject liquidity into money markets from one-and-three months to six-and-12 months, while setting minimum and maximum bids that correspond to the historically low target rate.
The bank said it will target a daily level of settlement balance in the financial system at $3 billion, a move it says will help drive the overnight rate to the bottom of the trading band.
Read the full article here.
The central bank sliced the overnight rate in half to 0.25 per cent - the lowest it says is practical - and signalled strongly it will have to keep it there until at least mid-2010.
In addition, the bank has extended the term of its purchase and resale agreements it uses to inject liquidity into money markets from one-and-three months to six-and-12 months, while setting minimum and maximum bids that correspond to the historically low target rate.
The bank said it will target a daily level of settlement balance in the financial system at $3 billion, a move it says will help drive the overnight rate to the bottom of the trading band.
Read the full article here.