Central bank warns U.S. turmoil a risk
September 6, 2008
Says interest rate already low enough to stimulate economy
HEATHER SCOFFIELD, ECONOMICS REPORTER
September 4, 2008
OTTAWA — The Bank of Canada held its key interest rate steady, saying rates are already low enough to stimulate a stagnant economy that remains vulnerable to economic and financial turmoil in the United States.
The central bank’s decision yesterday to keep its overnight rate at 3 per cent maintains its benchmark rate a full percentage point higher than the U.S. Federal Reserve Board’s key rate. But compared with other countries, and once inflation has been taken into account, that rate is considered quite stimulative, spurring consumers to spend instead of save. Read more
