By Josh Falle
Anybody wondering why the S&P/TSX Composite Index just jumped 200 points?
Bank of Canada, in a move last night cut interest rates. A sharp drop in oil prices has forced the Bank of Canada to cut its target overnight rate by 0.25{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}, bringing interest rates to new historic lows of 0.75{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}. The BoC added its bank rate is at 1.00{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} and its deposit rate is 0.50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}.
Many analysts predicted for them to hold current rates, but as 2015 revs up, it is proving to be a new kind of monster.
“The large decline in oil prices will weigh significantly on the Canadian economy,” the Bank of Canada said in its quarterly monetary policy report, which it also released Wednesday.