Bank of Canada: More Interest Rate Cuts

Bank of Canada is likely to cut the interest rate again according to Paul Jenkins the Senior Deputy Governor due to weakening economic growth and the global credit crisis.

In a speech in Toronto earlier today Jenkins said “Some further monetary stimulus will likely be required to achieve our 2 percent inflation target over the medium term”. The Canadian benchmark overnight lending rate was cut on October 21 to 2.25 percent.

Consumer confidents in Canada is at its lowest since 1982, with banks tightening their lending, and the economy worsening with falling crude oil prices and slow lumber exports and automobile to the US.
The Canadian dollar fell after Jenkins announcement as much as 2.6 percent to C$ 2383 against the US dollar. Canada hasn’t seen lows like this since October 29.

Source: Bloomberg