Bank of Canada lowers interest rate by 50 basis points.

March 4, 2008 - Forex Economic News

The Bank of Canada lowered its interest rate today by 50 basis points to 3.50 percent. The rate cut comes after the Bank lowered their rate by 25 basis points in January and December. Despite a healthy domestic economy, the Bank of Canada cited weakening export growth and a possible global economic slowdown as reasons for the rate cut. The economic slowdown of the U.S. and a rise in the Canadian dollar has hampered Canadian export growth and presents "downside risks" to Canada's economic outlook. The Bank feels that the risk of inflation is moderate as the report stated that, "Core and total CPI inflation – at 1.4 per cent and 2.2 per cent, respectively, in January – have also been consistent with the Bank's expectations." The Bank may not be done cutting rates as it commented that "further monetary stimulus is likely to be required in the near term to keep aggregate supply and demand in balance and to achieve the 2 per cent inflation target over the medium term." The next rate decision for the Bank of Canada is coming on April 22.

Tags: canadian dollar, bank of canada, interest rate, cad, rate cut

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