What's New

January 20, 2009 at 11:34 AM EST

The central bank's target for the overnight lending rate now stands at 1 per cent – lower than in 1958, when the most-watched policy rate was 1.12 per cent.

“The outlook for the global economy has deteriorated since the bank's December interest rate announcement, with the intensifying financial crisis spilling over into real economic activity,” the bank said in its gloomiest statement yet.

Canada's major commercial banks, which came under fire in December when they passed on only 50 basis points of the 75-point rate cut made by the central bank, reacted swiftly to its latest move, passing along the full reduction. (There are 100 basis points in a percentage point.)

Toronto-Dominion Bank and Bank of Montreal responded by announcing they have cut their prime lending rates by 50 basis points to 3 per cent – and BMO also said it is cutting key mortgage rates by 30 to 50 basis points. Canadian Imperial Bank of Commerce, Royal Bank of Canada, Bank of Nova Scotia and Laurentian Bank of Canada said later in the morning that they, too, have cut their prime rate to 3 per cent from 3.5 per cent.  Click here to read the whole article.