BIS Review 13/2002  3  Recent economic developments and prospects in Canada The immediate impact and the fallout from last September’s tragic events here in New York, and elsewhere in the United States, led to a sharp increase in economic uncertainty around the world, exacerbating the effects of the global economic slowdown that had become more evident by last summer.
In those circumstances, the Bank of Canada moved quickly and aggressively to lower interest rates. The aim was to minimize the economic effects of the terrorist acts and to limit the loss of confidence at home. Since last September, we have cut our overnight rate target by 200 basis points, bringing the total reduction since the beginning of 2001 to 375 basis points.