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Bank of Canada lowers rates for first time since March 2020

By Evan Taylor Jun 5, 2024 | 11:00 AM

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The Bank of Canada (BoC) has lowered its benchmark interest rate by a quarter percentage point, marking the first rate decrease since March 2020.

The benchmark rate is now 4.75 per cent, which is one of the primary factors banks and other money lenders consider when offering rates to the public.

The BoC pointed to cooling inflation rates as one of the leading factors.

BoC Governor Tiff Macklem said inflation continues to drop, with the most recent data from April coming in at 2.7 per cent. The BoC has set a goal of getting that rate to 2 per cent, and if it continues to trend in that direction more cuts are possible.

“If inflation continues to ease, and our confidence that inflation is headed sustainably to the 2 per cent target continues to increase, it is reasonable to expect further cuts to our policy interest rate,” said Macklem. “But we are taking our interest rate decisions one meeting at a time.”

The BoC is scheduled to deliver its next rate decision on July 26.