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Bank of Canada Announces Emergency 50bps Rate Cut, As FinMin Unveils C$10BN Support Program
After a day of relentless central bank interventions across Asia and Europe, which jumped the Atlantic this morning when the Fed announced not one but 6 emergency QE POMOs, moments ago Canada joined the panic response, when the Bank of Canada announced an emergency 50bps rate cut, lowering the overnight rate from 1.25% to 0.75%, generally in line with the market's expectations.
According to the central bank, "this 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."
The BOC maintained its easing bias, stating that it stood ready to adjust monetary policy further if required, while it dropped the reference in its January statement which stated policy was at an appropriate level. In its policy statement, the Bank said that while the economy had been operating close to potential, with inflation at target, the virus is a “material” negative shock to the Canadian and global outlooks; business activity in some regions has fallen sharply and supply chains have been disrupted, reflective in CAD and commodities, the statement noted.
The BOC also believes that as the virus spreads, business and consumer confidence will deteriorate further, which will depress activity. In light of all these developments, the central bank said that the outlook was clearly weaker now than it was in January.
Finally, the Bank said it "has also taken steps to ensure that the Canadian financial system has sufficient liquidity."
Some more details from the announcement:
The Bank of Canada today lowered its target for the overnight rate by 50 basis points to ¾ percent. The Bank Rate is correspondingly 1 percent and the deposit rate is ½ percent. This 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.
It is clear that the spread of the coronavirus is having serious consequences for Canadian families, and for Canada’s economy. 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.
The Bank will provide a full update of its outlook for the Canadian and global economies on April 15. 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 Bank has also taken steps to ensure that the Canadian financial system has sufficient liquidity. These additional measures have been announced in separate notices on the Bank’s website. The Bank is closely monitoring economic and financial conditions, in coordination with other G7 central banks and fiscal authorities.
Separately, Canada's finance minister said Canada is ready to take extraordinary measures to combat the COVID-19 outbreak, and to that purpose, Canada will establish credit support program to provide additional C$10 billion to businesses and stimulate the economy.
In response to the BOC announcement and modest fiscal stimulus, the Canadian dollar initially dropped but quickly regained all losses as the market was expecting the rate cut anyway, with money markets pricing in around 40bps worth of easing.
https://www.zerohedge.com/markets/bank-canada-announces-emergency-50bps-rate-cut-finmin-unveils-c10bn-support-program
Chairman of Mexico Stock Exchange Tests Positive for Coronavirus
The chairman of Mexico’s stock exchange, Jaime Ruiz Sacristan, has tested positive for coronavirus, becoming the first known high-profile Mexican executive to contract the fast-spreading disease.
Ruiz Sacristan will work from home for two weeks following a doctor’s instructions, the stock exchange said in a release. He received the positive test result on Thursday and has had no symptoms, according to the statement.
The chairman of the Bolsa Mexicana de Valores flew back from the U.S. this week to attend an annual banking convention in the port of Acapulco, but didn’t end up going to the event, Reforma newspaper reported.
https://www.bloomberg.com/news/articles/2020-03-13/chairman-of-mexico-stock-exchange-tests-positive-for-coronavirus
United States Mint Temporarily Closing Public Tours, Gift Shops, and Coin Store
The United States Mint is temporarily closing public tours of its facilities in Philadelphia and Denver beginning Monday, March 16. The Denver and Philadelphia Mint gift shops and the Washington, DC coin store will also be temporarily closed. This action is being taken to reduce the risk of Mint employees’ exposure to Coronavirus (COVID-19).
According to Mint Director David J. Ryder:
“[T]he health and safety of the Mint workforce is my highest priority. Many Mint employees interact with visitors from throughout the country and the world as tours are conducted. Public health officials are still learning about how COVID-19 spreads, so out of an abundance of caution, I have decided it is prudent to close our tours, gift shops and coin store. I understand this is an inconvenience to people who were looking forward to seeing how we mint our nation’s coins and medals, but my employees and their well-being are my greatest concern. We intend for this to be a temporary rather than a permanent closure. The Mint will continue to fulfill its mission of protecting our nation’s strategic assets and producing trusted currency, while also taking appropriate precautions given current public health risks.”
Ryder went on to state that no Mint employees have tested positive for COVID -19.
The Mint will announce the resumption of public tours as well as its gift shops and coin store through a press release and via social media.
https://coinweek.com/us-mint-news/united-states-mint-temporarily-closing-public-tours-gift-shops-and-coin-store/
BWAHAHAHAHHA!
yes…although there has been rumors that this has already been done. and not those pieces of shit that were widely circulated on the net either.
o7
it's going to be glorious!!