Source: Xinhua

10-09-2008 08:39

OTTAWA, Oct. 8 (Xinhua) -- The Central Bank of Canada has slashed its key lending rate by half a percentage point to 2.5 percent as part of the coordinated international efforts to breathe new life into the wheezing global economy.

The central bank said Wednesday that it is acting to ease "the recent intensification of the financial crisis," in a move that will provide "timely and significant support" to the economy.

The bank joined the U.S. Federal Reserve, the Bank of England, the European Central Bank, and the central banks of Sweden and Switzerland in cutting rates, while the Bank of Japan "expresses its strong support."

The banks said that inflationary pressures have started to moderate, "partly reflecting a marked decline in energy and other commodity prices." Meanwhile, the financial-sector meltdown "has augmented the downside risks to growth and thus has diminished further the upside risks to price stability."

The bank's target for the overnight rate goes down 0.5 point to2.5 percent, while the Federal Reserve's key policy rate falls to 1.5 percent.

"The intensification of the global financial crisis is having a marked impact on all countries ... credit conditions in Canada have tightened significantly, despite the relative health of our financial institutions," the central bank said in a statement.

 

Editor:Xiong