The Bank of Canada has lowered its key interest rate over concerns about the COVID-19 virus.
The central bank cut its overnight rate target by half a percentage point Wednesday to 1.25 per cent.
In a statement, the Bank of Canada says the virus is a “material negative shock” to the global economic outlook.
The central bank said the global economy was showing signs of stabilizing before the outbreak began.
“However, COVID-19 represents a significant health threat to people in a growing number of countries. In consequence, business activity in some regions has fallen sharply and supply chains have been disrupted,” it said.
The central bank said it is becoming clear that first-quarter growth in Canada will be weaker than expected.
The Bank of Canada said it is ready to adjust the rate further if needed “to support economic growth and keep inflation on target.”
Bank of Canada lowers overnight rate target to 1 ¼ percent #economy #cdnecon https://t.co/2jKeGIfYK6
— Bank of Canada (@bankofcanada) March 4, 2020
