Several Canadian banks and financial institutions have dropped their prime lending rate by 50 basis points for the second time in two weeks amid the spread of the coronavirus — this time to 2.95 per cent.
The moves effective Tuesday by the Royal Bank, Toronto-Dominion Bank, Scotiabank, Bank of Montreal, CIBC and the Desjardins Group match the Bank of Canada’s decision last Friday to drop its key lending rate by 50 basis points to 0.75 per cent.
The central bank says the unscheduled rate decision is a “proactive measure taken in light of the negative shocks to Canada’s economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices.”
National Bank was cutting its rate effective Wednesday.
Desjardins also says it is cutting its U.S. prime rate by a full percentage point to 3.75 per cent after the U.S. Federal Reserve again cut its rate on Sunday over the novel coronavirus.
The rate cuts will make mortgages and other borrowing cheaper, but has also raised concerns it will further inflame already overheated housing markets.