Canada’s commercial banks have each cut their prime lending rate by 50 basis points to 3.45%.
The move comes after the Bank of Canada cut its key interest rate by 50 basis points to 1.25% earlier on Wednesday. Royal Bank of Canada (TSX:RY) was first out of the gate late Wednesday afternoon to slash its prime lending rate hours after the central reduced its interest rate.
RBC said it would cut its prime rate 50 basis points to 3.45%, effective March 5, the bank said in a statement. By Wednesday evening, Royal’s four main peers — Bank of Nova Scotia (TSX:BNS), TD Canada Trust (TSX:TD), CIBC (TSX:CM), and Bank of Montreal (TSX:BMO) — had each matched the move and also lowered their prime lending rates to 3.45%.
Banks use the prime rate to help determine interest rates on loans such as lines of credit and variable-rate mortgages.
