March 3 (Reuters) - Canadian banks cut their prime lending rates on Tuesday after the Bank of Canada, the country's central bank, cut its key interest rate by a half-point to a record low of 0.5 percent.
The banks showed no reluctance to pass along the full 50- basis-point reduction in the Bank of Canada's overnight rate, in contrast to their more cautious approach in the autumn.
Bank of Montreal (BMO.TO:
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The other larger players -- Royal Bank of Canada (RY.TO:
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The Bank of Canada cut its key interest rate as expected, and signaled for the first time that it may resort to quantitative easing in the future.
The central bank also acknowledged that its latest projections for the Canadian economy now look optimistic in the light of the latest economic data, showing that the economy contracted at an annualized rate of 3.4 percent in the fourth quarter.
