The Bank of Canada is expected to pare borrowing costs again when it announces its next interest rate decision on Tuesday.

Economists see the central bank cutting its key overnight lending rate by half a percentage point, which would reduce it to one per cent.

The bank has already been aggressively cutting the cost of money, including a drop of three-quarters of a percentage point with its previous announcement in December, as it tries to bolster the Canadian economy.

The country shed 70,000 jobs in November and 34,000 in December, while inflation, which used to be a major worry due to rising energy costs, is easing, thanks to a turnaround in those same energy costs.

Charmaine Buskas, a senior economics strategist at TD Securities, said the statement that accompanies the Bank of Canada's rate decision will be closely scrutinized.

"The bank will need to strike a delicate balance between signalling further cuts, and sounding too dovish and allowing the market to get ahead of itself," Buskas said in a recent commentary. "The statement will undoubtedly maintain the rather dour paragraph describing the economic outlook and the lower profile for inflation."

The Bank of Canada will also provide its latest view of the health of the Canadian economy when it releases its monetary policy update on Thursday.