Prime Rate Hits Lowest Level in History

The Bank of Canada cut its key lending rate to another record low today. The target rate for overnight loans between commercial banks is reduced to 0.25 percent, the lowest since Canada's central bank was founded in 1934 and the lowest it can go. Bank of CANADA also signalled that it would keep the interest rate at this level until the end of June of next year based on its inflation forecast.

Bank of Montreal, Royal Bank of Canada, and CIBC moved to lower their prime rates shortly after the central bank's decision was announced. The other chartered banks are expected to follow and lower their prime lending rates by 25 basis points, to 2.25 per cent.

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