Press Conference Opening Statement – March 13, 2020

Thank you, Minister. The Bank of Canada is contributing to this collective effort to support the Canadian economy and financial system, and to ensure credit channels remain open.

The Bank is cutting its target for the overnight rate by 50 basis points to ¾ of a percent. It is already clear that the spread of the coronavirus is having serious consequences for Canadian families, and for Canada’s economy.

In addition, lower prices for oil, even since our last scheduled rate decision on March 4, will weigh heavily on the economy, particularly in energy intensive regions.

Combined with the other measures announced today, lower interest rates will help to support confidence in businesses and households. For example, borrowing costs will be lowered both for new purchases and through variable rate mortgages and mortgage renewals.

Today, the Bank also announced a new Bankers’ Acceptance Purchase Facility. This will support a key funding market for small- and medium-size businesses at a time when they may have increased funding needs and credit conditions are tightening.

The Bank has also taken other steps to ensure that the Canadian financial system has sufficient liquidity. These additional measures have been announced in separate notices on the Bank’s website.

The Bank of Canada is taking concerted action to support the Canadian economy during this period of economic stress. The Bank’s Governing Council stands ready to do what is required to support economic growth and keep inflation on target, and we will continue to ensure that the Canadian financial system has sufficient liquidity.