Bank of Canada delivers 50 basis point rate cut
THE CANADIAN PRESS
Bank of Canada Governor Tiff Macklem and his Governing Council colleagues lowered borrowing costs at a fourth-straight meeting in Ottawa Wednesday.
The Bank of Canada lowered its benchmark policy interest rate by a half percentage point on Wednesday, citing confidence that inflation has sustainably reached its 2 per cent target.
The central bank cut the overnight rate by 50 basis points to 3.75 per cent, according to a statement on its website. While Wednesday’s move marks the fourth consecutive rate cut, it represented an acceleration of efforts to loosen monetary policy.
Before today, the central bank had cut interest rates but only by a quarter point in each of its previous three meetings.
The move will lower the prime lending rate at commercial banks to just under 6 per cent. (Prime rates are currently 2.2 percentage points above the central bank’s policy rate).
And the Bank of Canada said more rates are coming.
“If the economy evolves broadly in line with our latest forecast, we expect to reduce the policy rate further,” policymakers led by Governor Tiff Macklem said in a statement. “However, the timing and pace of further reductions in the policy rate will be guided by incoming information and our assessment of its implications for the inflation outlook. We will take decisions one meeting at a time.”
