In an unscheduled announced, BoC decided to lower overnight rate by -50bps to 0.25%. Bank rate is then correspondingly at 0.50% and deposit rate at 0.25%. BoC said, “this unscheduled rate decision brings the policy rate to its effective lower bound and is intended to provide support to the Canadian financial system and the economy during the COVID-19 pandemic.”
Additionally, BoC launches two new programs. Firstly, the Commercial Paper Purchase Program (CPPP) will help to alleviate strains in short-term funding markets and thereby preserve a key source of funding for businesses. Secondly, to address strains in the Government of Canada debt market and to enhance the effectiveness of all other actions taken so far, the Bank will begin acquiring Government of Canada securities in the secondary market. Purchases will begin with a minimum of $5 billion per week, across the yield curve.