The Bank of Canada will inject 4 billion Canadian dollars (about 4 billion U.S. dollars) into the capital markets over the next few months to fight the global credit crisis, the bank announced Tuesday.
"Since the co-ordinated actions taken in December 2007, the G10central banks have continued to work together closely and to consult regularly on liquidity pressures in funding markets," the Bank of Canada said in a statement issued Tuesday.
However, "pressures in some of these markets have recently increased again," it said.
The bank cut its key lending rate to 3.5 percent, a reduction of half a percentage point, last week, in an attempt to keep the Canadian economy moving in the face of flagging demand in the United States.
The bank announced Tuesday it would cover the purchase and resale of certain types of securities such as government bonds. The purchase and resale agreements will mature in April and May.
Credit crisis worries helped push the overall S&P/TSX composite index down on Monday, as it fell almost 277 points to just over 13,000.
The TSX financial sector dropped 2.1 percent, but the base metals sector dropped 4.5 percent on fears that demand from China might fall.
Source:Xinhua
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