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INSTANT VIEW-Bank of Canada lowers key rate to 2.50 pct

Wed, Oct 8 2008, 11:44 GMT
http://www.afxnews.com

NEW YORK TORONTO, Oct 8 (Reuters) - The Bank of Canada unexpectedly cut its key interest rate by 50 basis points to 2.50 percent on Wednesday in a coordinated effort with other central banks in a bid to calm ailing financial markets.

LINKS:

Story

Web: http://www.bankofcanada.ca/en/index.html

KEY POINTS:

* Bank of Canada says cuts overnight rate 50 bps as part of coordinated global central bank effort

* Bank of Canada says overnight rate now stands at 2.50 pct

* Bank of Canada says operating band for overnight rate is also lowered to 2.75 pct

* BoC says intensification of global financial crisis having market impact on all countries

* BoC says conditions in global markets have deteriorated "sharply" in recent weeks

* BoC says credit conditions in Canada have tightened "significantly"

* BoC says weaker us growth, other trading partners will increase drag on Canada economy

* BoC says inflation expectations remain "well anchored"

* BoC says these actions will provide timely and significant support to the Canadian economy

* BoC says to continue to monitor financial, economic developments

COMMENTARY:

CRAIG WRIGHT, CHIEF ECONOMIST, ROYAL BANK OF CANADA :

"Our view was that we had 50 basis points coming from the Bank of Canada. We got it today. Given our growth outlook that things will improve as we go forward we don't think there's any need for further ease depending on how well this is received. One hopes this is well received given that most central banks are on the same page."

Keywords: CANADA ECONOMY/RATES

Chuck Mikolajczak

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