Bank of Canada cuts key interest rate by 25 basis points to 2.5 percent

 

 

The Bank of Canada cut interest rates for the first time since March. The Bank of Canada cut its key interest rate by 25 basis points in response to ongoing uncertainty in the trade sector. With this, the benchmark rate was lowered from 2.75 percent to 2.5 percent. The central bank has kept the interest rate at 2.75 percent for three consecutive times.

Economists had predicted that the Bank of Canada would cut interest rates despite the increase in inflation due to the weakening economy and a sluggish labor market in recent months due to US President Donald Trump's tariff threats. At the same time, the Bank of Canada noted that the economy remains weak amid the ongoing trade war.

Economists point out that the latest reports on GDP and the unemployment rate rising above seven percent last month suggest that a reduction in policy rates is appropriate.