Royal Bank of Canada Cuts Prime Rate to 4.95% Following Bank of Canada's Decision

The Royal Bank of Canada and Toronto-Dominion Bank have announced a reduction in their prime rate, aligning with the recent move by the Bank of Canada.

This change comes after the central bank decided to lower its interest rate by 25 basis points to 2.75%. As a result, both banks have decreased their prime rate from 5.20% to 4.95%.

The new prime rate will take effect on March 13. This adjustment in the prime rate is significant as it can influence the cost of loans and borrowing for consumers and businesses.

Impact on Borrowers

With the prime rate at 4.95%, borrowing costs for loans linked to this rate will decrease, making it more affordable for individuals and businesses to take on loans. This can lead to increased spending and investment, potentially stimulating economic activity.

Market Reactions

The immediate reaction from the financial markets suggests that this decision will be generally received positively. Lower borrowing costs can encourage economic growth, especially in a context where consumers may be looking to refinance existing loans or take out new credit.

Overall, the actions taken by the Royal Bank of Canada and TD Bank reflect a broader strategy from financial institutions to respond to the changing economic landscape as indicated by the central bank's adjustments.

finance, banking, economy