Bank of Canada cuts rate 50 basis pts

March 4, 2008 2:18 pm

The Bank of Canada wisely has cut its trend setting overnight interest rate by 50 basis points . It has also indicated that it will likely cut rates further in the current circumstances. This is definitely a correct decision as it seems very likely that the Fed will cut rates further perhaps by as much as 75 basis points later this month. If the Bank of Canada had not cut the rate the Canadian dollar would have gone through the roof, driven as it is by the heady combination of the commodity boom, oil and gas price rises and the interest rate differential with the US.