Central Bank makes highly-anticipated interest rate cut

Canada’s key interest has dropped for the first time since last July.

The Bank of Canada has cut its benchmark interest rate by 1/4 of a percentage point, the first reduction in more than four years, bringing its policy rate to 4.75 per cent.

It’s the first time the bank has lowered the rate by 25 basis points since the early days of the pandemic.

The rate dictates the cost of borrowing widely in Canada, including what rate we pay on our mortgages and other loans.

The decision was widely expected by economists.

B-O-C officials say the decision to lower the rate comes as evidence shows that underlying inflation is easing at a sustainable level.

In a statement the Bank of Canada said “Recent data has increased our confidence that inflation will continue to move towards the 2 per cent target.”