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that bank of canada I delivered an extra large one. interest rate It was cut by 0.5 percentage points on Wednesday, speeding up the easing of borrowing costs.
The central bank’s current policy interest rate is 3.75%. Wednesday’s decision marks the fourth consecutive rate cut since June and the Bank of Canada‘s largest rate cut since the 2009 global financial crisis, excluding the COVID-19 pandemic.
The Bank of Canada has cut its quarter-point rate at a more moderate pace so far in its easing cycle, but economists had widely expected a half-point cut that would be excessive.
Not only has inflation returned to the Bank of Canada’s 2 per cent target since last September’s interest rate cut. It has even fallen below 1.6% in the most recent figures..
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“Inflation is now back to our 2 per cent target and we want to keep it close to that target, which is why we took bigger steps today,” Bank of Canada Governor Tiff Macklem said in prepared remarks.
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At the same time, cracks have appeared in Canada’s labor market and growth remains sluggish elsewhere in the economy. Most big bank economists argued that a 50 basis point cut was reasonable to stimulate growth.
Macklem said if the economy continues to develop in line with the central bank’s expectations, further interest rate cuts would boost demand and keep inflation at target levels.
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The Bank of Canada’s prime rate tells you what interest rates lenders offer on many loans, especially mortgages. Wednesday’s large interest rate cut provides immediate relief to Canadians with variable interest rates and bodes well for those with mortgage renewals coming up.
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