OTTAWA – The Bank of Canada will announce its decision on a key interest rate later today against a backdrop of low oil prices, a tumbling Canadian dollar and grim prospects for economic growth.
The trend-setting policy rate sits at 0.5 per cent, and if central bank governor Stephen Poloz were to lower that, it would bring the rate down to levels not seen in years.
The last time the interest rate was below 0.5 per cent was in 2009.
That was when Mark Carney, Poloz’s predecessor, pegged it at 0.25 per cent as the country was in the grips of a deepening recession.
MORE: Interest rate cut may deliver ‘hammer blow’ to consumers, some warn
Poloz dropped the rate twice last year to help absorb the impact of sliding oil prices, but crude has since fallen even further, hovering below US$30 a barrel in recent days.
The first Poloz rate cut — almost a year ago to the day — blindsided markets, as it defied expectations he would hold the rate steady.
WATCH: Finance Minister Bill Morneau says the Liberal Party is paying close attention to the economy and falling dollar.
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