The Bank of Canada on Friday lowered a key interest rate to 0.25 percent as part of a drive to cushion the impact of the coronavirus pandemic.
"This unscheduled rate decision brings the policy rate to its effective lower bound and is intended to provide support to the Canadian financial system and the economy during the COVID-19 pandemic," the bank said of the change in the so-called overnight lending rate.
The government of Prime Minister Justin Trudeau has injected Can$107 billion into the economy to help businesses and households affected by the killer pandemic sweeping the globe.
"The spread of COVID-19 is having serious consequences for Canadians and for the economy, as is the abrupt decline in world oil prices," the bank said in explaining its interest rate decision.
The world's fourth-largest oil producer, Canada has been devastated by oil prices that have fallen as economies grind to a halt because of the coronavirus pandemic. Its western oil-producing province of Alberta has been particularly hard hit.
"The intent of our decision today is to support the financial system in its central role of providing credit in the economy, and to lay the foundation for the economy's return to normalcy," the bank said.