National Bank of Canada and Laurentian Bank of Canada both announced plans Monday to drop their prime rates by 50 basis points to 2.45 per cent. They join the Big 5 banks in decreasing lending rates to match the Bank of Canada’s unscheduled interest rate announcement on Friday.
The new National Bank and Laurentian Bank rates are effective Tuesday. Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia , Bank of Montreal and Canadian Imperial Bank of Commerce all cut their prime rates to 2.45 per cent on Friday, and were effective as of Monday.
The Bank of Canada Friday unexpectedly cut its key interest rate to help the county weather the economic fallout of the coronavirus pandemic.
The Bank of Canada cut its overnight interest rate by 50 basis points to 0.25 per cent, its lowest level since June 2010.
Separately, Canada’s financial regulator eased its capital and liquidity requirements for banks, changed credit loss provisioning and allowed more loans to be securitized.
The pandemic has forced several governments to take actions as businesses grind to a halt and several retailers close stores to curb the spread of the highly-contagious diseases, leaving many people jobless.
This is the third time the big banks have cut prime rates over the past month. The prime rate impacts the cost of borrowing for many financial products, including variable rate mortgages.
Reuters, Globe staff
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