Bank Of Canada Slashes Interest Rates By Another 50 Basis Points
2024-12-02
3671
(fxcue news) - With inflation around 2 percent, the economy in excess supply, and recent indicators tilted towards softer than projected growth, the Bank of Canada on Wednesday announced its widely expected decision to slash interest rates by another half point.
The Bank of Canada said it decided to reduce its target for the overnight rate by 50 basis points to 3.25 percent, with the Bank Rate at 3.75 percent and the deposit rate at 3.25 percent.
The Canadian central bank also lowered interest rates by 50 basis points in October on the heels of three strait 25 basis point cuts.
The Bank of Canada said the decision to continue slashing rates is intended to support growth and keep inflation close to the middle of the 1-3 percent target range.
Noting that rates have been reduced substantially since June, the Bank of Canada said the need for further rate cuts would be evaluated "one decision at a time."
"Our decisions will be guided by incoming information and our assessment of the implications for the inflation outlook," the Bank of Canada said. "The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target."
In its statement, the Bank of Canada noted the possibility U.S. President-elect Donald Trump's incoming administration will impose new tariffs on Canadian exports to the U.S. has increased uncertainty and clouded the economic outlook.
The Bank of Canada's next monetary policy decision is scheduled for January 29, 2025.
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