The Bank of Canada on Friday cut its overnight interest rate by 50 basis points to 0.25 percent, the third time this month, to the lowest level in a decade.

The central bank also launched what observers called its first-ever quantitative easing program, saying it would buy government and commercial debt.

"A firefighter has never been criticized for using too much water," Bank of Canada Governor Stephen Poloz told reporters shortly after the rate cut was announced.

Canada said it will cover 75 percent of wages for small businesses as officials sought to limit layoffs and bolster an economy hard hit by the coronavirus pandemic.

Prime Minister Justin Trudeau unveiled several measures for small- and medium- businesses including one-year interest-free loans, an additional 12.5 billion U.S. dollars in funding via the country's export development bank and delays in duties and tax payments to help boost cash liquidity.

"Our government knows you're really feeling the impacts of this pandemic especially with the end of the month coming up," Trudeau said in his daily address to Canadians. "So here's what we're going to do to take some of that pressure off."

Trudeau, who has been in self-isolation since his wife tested positive for the coronavirus last week, said he will continue to work from home to model good practice.

Canada's parliament this week approved a 52-billion Canadian dollar (37 billion U.S. dollars) financial package to support the economy and Canadians left without work because of the impact of the epidemic.

"We want to make sure that we've a great market function and indeed that the economy has a great foundation for growth when activity resumes," Poloz said.

While Poloz said the bank stands ready to "take further action as required," he said the central doesn't at this stage believe it would be sensible to think of interest rates going lower than this.

The Canadian dollar clawed back some of its declines after the rate cut, to trade at 1.4040 to the U.S. dollar.