Rapidly deteriorating credit conditions in Canada and around the globe, has motivated the Bank of Canada to join the U.S. Federal Reserve, European Central Bank and three other central banks Wednesday in cutting interest rates by 50 basis points.
As a result, the Bank of Canada's benchmark lending rate stands at 2.5%. I expect that the Canadian central bank is not finished with rate reductions, with more reductions to come.
TD Canada Trust today announced that it has lowered its prime lending rate by 25 basis points to 4.50 per cent, effective October 9, 2008. It is likely that the other Canadian banks will follow suit.