The Bank of Canada cut interest rates by half a percentage point in an emergency move to buffer the nation’s economy from the double hit from the coronavirus and tanking oil prices.

The Ottawa-based central bank lowered its policy rate to 0.75 per cent and said it “stands ready” to move again if needed. Governor Stephen Poloz, in a joint press conference Friday afternoon with Finance Minister Bill Morneau, also announced a new facility to support funding markets for small- and medium-size businesses “at a time when they may have increased funding needs and credit conditions are tightening.”

“It is clear that the spread of the coronavirus is having serious consequences for Canadian families, and for Canada’s economy,” the Bank of Canada said in a statement. “In addition, lower prices for oil, even since our last scheduled rate decision on March 4, will weigh heavily on the economy, particularly in energy intensive regions.”

This marks the first emergency rate cut by the country’s central bank since the last 2008-2009 financial crisis and is part of a coordinated government-wide response to respond to a slowdown that threatens to drive the nation’s economy into a recession. Morneau announced he would deliver a fiscal stimulus package next week that will include an additional $10 billion (US$7.1 billion) in new funding to the country’s two business financing agencies -- the Business Development Bank of Canada and Export Development Canada.

Jeremy Rudin, head of Canada’s banking regulator, was also on hand and announced he would lower the nation’s domestic stability buffer by 1.25 percentage points of risk-weighted assets, effective immediately. The buffer will drop to 1 per cent, from its prior level of 2.25 per cent.

The growing number of coronavirus cases globally, the shock to oil prices and volatility in financial markets have prompted fears that Canada will undergo an economic contraction in the second and third quarters of 2020.

The emergency rate cut was not entirely unexpected on the heels of the Bank of Canada’s March meeting, where it lowered interest rates by half a percentage point for the first time in more than four years. Still, the response represents a dramatic move in an effort to keep the economy running amid rapidly deteriorating financial conditions.

“The Bank of Canada is taking concerted action to support the Canadian economy during this period of economic stress,” Poloz said. “The Bank’s Governing Council stands ready to do what is required to support economic growth and keep inflation on target, and we will continue to ensure that the Canadian financial system has sufficient liquidity.”

Canada is not alone. After days of incremental measures, global policy prescriptions were coming thick and fast on Friday. The U.S. Congress was said to be near a deal on a relief bill. The European Union prepared to suspend government spending rules, and regulators in Italy and Spain banned short-selling on some stocks. China’s central bank said it would pump in US$79 billion to bolster the economy.

In Canada, officials from Morneau’s office were busy calling bank economists to get advice on potential measures, seeking input on what specific policies should be taken and how large any stimulus package should be, according to three people familiar with the matter who spoke on condition they not be identified.

At the press conference, Morneau declined to say how large the package will be but said he would do “whatever it takes.”