New low lending rate could eventually reach businesses, consumers

In an effort to ease tight credit markets, the Bank of Canada slashed its overnight lending rate to its lowest level ever.

The central bank lowered its lending rate another 50 basis points to 0.5 percent.  Since December 2007 the bank has cut the rate by 400 basis points.

The forthcoming April Monetary Policy Report will reveal steps the Bank of Canada may take to further stimulate the economy.

Recent actions to help spur economic recovery are expected to be felt in the latter half of this year, says the central bank.

According to a Globe and Mail article, Ontario Premier Dalton McGuinty is said to be urging regional banks to pass on the new rates to household and business borrowers.

Without accessibility to credit, business growth, expansion and hiring prospects are impaired.  Absent these activities the economy will linger in recession, the article reports McGuinty as previously saying.

Economic recovery in the U.S. will help buoy Canada's exports, says the newspaper.

The U.S. government continues to take a number of actions aimed at stabilizing the financial markets and restarting lending. 

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