Canada’s central bank cut its key interest rate on Tuesday by three quarters of a percentage point to its lowest level in 50 years, saying the country was heading into a recession because of the global economic crisis.
It was the largest cut in the overnight rate since October 2001 in the aftermath of the Sept. 11, 2001, terrorist attacks and brought the key rate to its lowest level since 1958.
The cut to 1.5 percent followed two cuts in October that lowered the rate by three quarters of a point.
PHOTO: AP
The Bank of Canada said the outlook for the world economy had deteriorated significantly and that the global recession would be broader and deeper than previously anticipated.
“Global financial markets remain severely strained,” the bank said in a statement.
The consensus of economists was for a half-point cut, but many also speculated that bolder action might be required.
Slowing demand appeared to be a major concern.
“The recent declines in terms of trade, real income growth and confidence are prompting more cautious behavior by households and businesses,” the bank said.
The statement did not say how long the bank expected the slump to last but said bold actions by governments and central banks were beginning to loosen up global money markets and support economic growth.
The lower interest rates, if passed on by Canada’s big commercial banks, would encourage businesses and households to borrow and spend, thereby stimulating economic activity.
The credit crisis and a global sell-off of commodities have slowed Canada’s resource-rich economy. Alberta’s once booming oil sands sector has cooled as every major company has scrapped or delayed some expansion plans.
Canadian Prime Minister Stephen Harper said the central bank rate cut would provide “significant economic stimulus.” However, he conceded more must be done in the Jan. 27 government budget.
“Our assessment is we’re going to need additional fiscal policy action,” Harper said an interview with the Canadian Broadcasting Corp.
“We don’t need probably as much stimulus as the United States thinks it needs. But we’re going to need a significant stimulus package,” he said.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique