22 Jan 2015
BoC cuts rates citing growth concerns – Varengold
FXStreet (Barcelona) - The Varengold Bank Research Team shares that the Bank of Canada in a surprising move cut its interest rates by 0.25% citing the fall in oil prices as a threat to its economic growth and inflation targets.
Key Quotes
“The Bank of Canada stunned markets by cutting interest rates on Wednesday, citing a threat to economic growth and its inflation targets from the dramatic drop in oil prices and said the bank stood ready to ease policy further if necessary.”
“The bank cut its overnight benchmark to 0.75 percent from 1 percent, where it had been since September 2010, ending the longest period of unchanged rates in Canada since 1950.”
“The cut caught markets by surprise and sent the Canadian dollar to a nearly six-year low against the greenback. The Toronto stock market's main index surged 1.8 percent.”
“Oil prices have fallen by half in the past six months to below $50 a barrel, and Canada is the biggest foreign supplier of crude oil to the U.S. market. While cheaper energy will broadly help the United States and other importers, it will be "unambiguously negative" for Canada, the bank said.”
Key Quotes
“The Bank of Canada stunned markets by cutting interest rates on Wednesday, citing a threat to economic growth and its inflation targets from the dramatic drop in oil prices and said the bank stood ready to ease policy further if necessary.”
“The bank cut its overnight benchmark to 0.75 percent from 1 percent, where it had been since September 2010, ending the longest period of unchanged rates in Canada since 1950.”
“The cut caught markets by surprise and sent the Canadian dollar to a nearly six-year low against the greenback. The Toronto stock market's main index surged 1.8 percent.”
“Oil prices have fallen by half in the past six months to below $50 a barrel, and Canada is the biggest foreign supplier of crude oil to the U.S. market. While cheaper energy will broadly help the United States and other importers, it will be "unambiguously negative" for Canada, the bank said.”