In an unscheduled move, the Bank of Canada (BoC) recently announced it was cutting its overnight lending rate to 0.75 per cent, effective March 16. The move was made to counter the negative economic repercussions of the COVID-19 pandemic and plummeting oil prices.
“It is clear that the spread of the coronavirus is having serious consequences for Canadian families, and for Canada’s economy,” the BoC said in a release. “In addition, lower prices for oil, even since our last scheduled rate decision on March 4, will weigh heavily on the economy, particularly in energy intensive regions.
“As the situation evolves, Governing Council stands ready to adjust monetary policy further if required to support economic growth and keep inflation on target.”
The BoC is scheduled to announce its overnight rate target and provide another update on its outlook for the Canadian and global economies on April 15.
Following the BoC announcement, the Office of the Superintendent of Financial Institutions announced that planned changes to the mortgage stress test are being shelved indefinitely.
The changes, which were set to come into effect on April 6, would have eased the test’s qualification criteria, making it easier for prospective buyers to qualify for a mortgage.