The Bank of Canada has slashed the overnight interest rate by half a point to 3%. The overnight rate is what big banks charge eachother for overnight loans. It is the second cut in the the past few months and will lead to immediate savings by those with variable rate mortgages or other floating interest rate loans.
"The bank is now projecting a deeper and more protracted slowdown in the U.S. economy," the Bank of Canada said in a statement with the rate announcement.
"This has direct consequences for the Canadian economic outlook, with declining exports projected to exert a significant drag on growth in 2008. In addition, tightening credit conditions and softening sentiment are expected to moderate business investment and consumer spending."
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