Bank of Canada cuts rates to 50-year low

Source From(http://ca.news.yahoo.com/s/reuters/081209/business/cbusiness_us_economy_bankofcanada_8)
The bank of Canada has cut its key interest rate by three-quarters of a percentage point to a fifty-year low of one point five percent on Tuesday. it also declared the Canadian economy to be in recession. Since December 2007, the bank of Canada has lowered its interest rate by three full percentage points. "The bank will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required," it said. so it is possible for the global recession to become worse. Before the bank cut its interest rates, eleven of Canada's twelve primary securities dealers had predicted the bank would cut rates by a half-point and only one had forecast a three-quarters point cut.

In this chapter, it introduced some major functions and services of a bank. one of them is the bank interest. the connection between this article and this chapter is bank. Bank undertake your money's security and also provides their customers' many convenient way to their daily transactions. For example cheques and credit card can help people get rid of cash. As all of you know bring a bunch of cash to shop is not a smart idea. People can also borrow money from the bank temporary and that's how APR existed. The terms annual percentage rate (APR), nominal APR, and effective APR (EAR) describe the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage, credit card, etc. It is a finance charge expressed as an annual rate.

I think consumer lending rates are not going to drop much further. In fact, if the bankruptcy rate goes up, so will they. After all profits is one of the most important thing for a company. Banks have many ways to earn their profits. They invest other people's money--the money that is deposited to earn their profits and get money from fees (ATM fees, overdrawn accounts, etc. They also receive interest on the money they lend which is the APR. The rat of APR is always relate and depends on the global economic condition. By lower Nominal APR and the Annual APR, many banks are able to encourage more people to use credid card or to lend money from banks. Also every time transaction occur on credit card or Visa, the bank will charge certain amount of fees.