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Bank of Canada pumps $7B, expands bond buy-backs to ease economic concerns


OTTAWA — The Bank of Canada says it is providing $7 billion to the country's banking system and expanding its bond buy-back program.

The measures announced late Thursday after the markets closed are the latest attempt by the central bank to keep the economy moving as the novel coronavirus continues to sow economic uncertainty.

The moves also came after the U.S. Federal Reserve pumped vastly more money, US$1.5 trillion, into American financial markets, which did little to stop the bleeding.

Canada's central bank says in a release that the two measures are aimed at supporting "the continuous functioning of financial markets."

It was just last week that the bank slashed its trend-setting interest rate by half a percentage point to help homeowners renewing mortgages and those with flexible mortgages.

At the time, governor Stephen Poloz left the door open to lowering the key rate target from 1.25 per cent, the lowest it has been since early 2018, depending on how deep COVID-19 cuts into the domestic economy.

This report by The Canadian Press was first published March 12, 2020.

The Canadian Press