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

OTTAWA – The Bank of Canada prepared to increase the cash it pumps into the financial system and Finance Minister Bill Morneau stressed the need for fiscal measures to manage the impact of COVID-19 as official Ottawa responded to another market plunge. Thursday saw sharp drops on North American stock markets: 12.34 per cent on the S&P/TSX composite index,…

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

OTTAWA – The Bank of Canada prepared to increase the cash it pumps into the financial system and Finance Minister Bill Morneau stressed the need for fiscal measures to manage the impact of COVID-19 as official Ottawa responded to another market plunge.

Thursday saw sharp drops on North American stock markets: 12.34 per cent on the S&P/TSX composite index, and a 9.99 per cent drop on the Dow Jones industrial average – its worst day since 1987.

The Bank of Canada responded with a $7-billion promise to the country’s banking system and an expansion of its bond buy-back program, making moves it hasn’t used since the financial crisis and downturn just over a decade ago.

Earlier in the day, the U.S. Federal Reserve pumped vastly more money, US$1.5 trillion, into American financial markets, which did little to stop the bleeding on North American stock markets.

Canada’s central bank said in a release that its own two measures are aimed at supporting “the continuous functioning of financial markets,” and foreshadowed that more tools could be pulled out.

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

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