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Bank of Canada Begins First-Ever Large Scale Asset Purchases

  • Interest rate also cut to effective lower bound of 0.25%
  • Poloz leery of calling it QE, says focus is financial system
Stephen Poloz

Stephen Poloz

Photographer: David Kawai/Bloomberg
Updated on

The Bank of Canada announced a large scale asset purchase program and cut its benchmark interest rate to a record low in a bid to ease financial-market strain and shield the nation’s economy from coronavirus fallout.

The central bank lowered its policy rate Friday by another half a percentage point to 0.25%, adding in a statement that the unscheduled decision brings the benchmark as low as policy makers are willing to take it for now. It also announced for the first time it plans to start buying a minimum of C$5 billion ($3.5 billion) a week in government securities as well as short-term debt issued by companies.