The Bank of Canada lowered its overnight rate target Friday by half a percentage point to 0.25 per cent.
The central bank said it is intended to help support the country’s financial system and the economy during the COVID-19 pandemic.
“The spread of COVID-19 is having serious consequences for Canadians and for the economy, as is the abrupt decline in world oil prices,” the bank said in a statement.
“The pandemic-driven contraction has prompted decisive fiscal policy action in Canada to support individuals and businesses and to minimize any permanent damage to the structure of the economy.”
The bank also launched two new programs Friday to help the economy.
The Commercial Paper Purchase Program will help alleviate strains in short-term funding markets, preserving a key funding source for businesses.
The Bank of Canada will also begin acquiring Government of Canada securities in the secondary market, beginning with a minimum of $5 billion per week.
“Governing Council stands ready to take further action as required to support the Canadian economy and financial system and to keep inflation on target,” said the bank.
