OTTAWA, Sept. 4 (Xinhua) — The Bank of Canada reduced its policy rate by 25 basis points to 4.25 percent on Wednesday.
The bank said in a news release that with continued easing in broad inflationary pressures, the Governing Council decided to reduce the policy interest rate by a further 25 basis points.
The Bank of Canada reduced its policy rate by 25 basis points to 4.5 percent in late July.
“If inflation continues to ease broadly in line with our July forecast, it is reasonable to expect further cuts in our policy rate,” Governor Tiff Macklem said at a press conference.
According to the release, the country’s inflation slowed further to 2.5 percent in July. High shelter price inflation is still the biggest contributor to total inflation but is starting to slow. Inflation also remains elevated in some other services.
The bank said the global economy expanded by about 2.5 percent in the second quarter and in Canada, the economy grew by 2.1 percent, led by government spending and business investment.
It is continuing the policy of balance sheet normalization, the Bank of Canada said.
