Canada’s soaring real estate market survived the 2008 financial crisis with barely a scratch. With a surprise rate cut, Bank of Canada Governor Stephen Poloz is trying to make sure it survives an oil price crash.
The central bank cut its benchmark interest rate a quarter of a percentage point to 0.75 percent on Wednesday, an unexpected move it said would buffer the Group of Seven’s largest oil exporter from a 55 percent drop in crude oil since June.
In addition to weighing on inflation, business and government spending, the central bank said the “unambiguously negative” drop in oil prices will be a hit to jobs and income that may rattle consumption and housing.
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