IMF backs Canada cut despite overvalued housing
Fund says decision to lower rates for first time in four years is ‘in line with staff advice'
The Bank of Canada's decision last week to cut interest rates amid a drop in oil prices and in the face of an overvalued housing market has received support from the International Monetary Fund (IMF).
The central bank cut its benchmark rate by 25 basis points to 0.75% on January 21 – the first change in four years – to mitigate the impact of lower oil prices on Canada's economy, which is reliant on crude exports.
In an Article IV report published today, the IMF said the policy move was "in line
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