Oil prices probably will guide the Bank of Canada through the early phase of the COVID-19 crisis.
The SARS epidemic of 2003 is of limited use since China wasn’t a central part of the global economy back then, but Canada’s central bank knows what to do when commodity prices tumble.
Governor Stephen Poloz approved two interest-rate cuts in 2015 to get ahead of the damage he knew would be caused by the collapse of oil prices at the end of 2014. He revisited that episode on March 5 in Toronto, where he gave his first public remarks since slashing the benchmark rate by a half-point some 24 hours earlier.
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