Canadians are getting a little bit of interest rate relief.
The Bank of Canada announced Wednesday morning it is lowering its benchmark policy overnight rate target by 25 basis points, to 4.75 per cent.
The central bank cited easing inflation and slower economic growth as factors in its decision.
“With continued evidence that underlying inflation is easing, Governing Council agreed that monetary policy no longer needs to be as restrictive and reduced the policy interest rate by 25 basis points,” a release from the Bank of Canada explains. “Recent data has increased our confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain. Governing Council is closely watching the evolution of core inflation and remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.”
Canada’s inflation rate fell to 2.7 per cent in April. While first quarter GDP growth was 1.7%, lower than forecasted.
Today’s decision is the first interest rate cut from the Bank of Canada in more than four years.
