The Bank of Canada has lowered its target for the overnight interest rate by 50 basis points to 1.25 per cent. The COVID-19 virus is behind the move. The bank says, “While Canada’s economy has been operating close to potential with inflation on target, the COVID-19 virus is a material negative shock to the Canadian and global outlooks, and monetary and fiscal authorities are responding.” Before the outbreak, the global economy was showing signs of stabilizing. However, COVID-19 represents a significant health threat to people in a growing number of countries. As a result of that, the bank says, business activity in some regions has fallen sharply and supply chains have been disrupted. This has in turn pulled down commodity prices and the Canadian dollar has depreciated.