BoC delivers half percentage point rate cut, says it now must keep inflation at 2%
The Bank of Canada delivered a supersized interest rate cut Wednesday in response to the recent decline in inflation, bringing its key policy rate down by half a percentage point.
With annual price growth now around two per cent, the central bank says its job has shifted from lowering inflation to maintaining it around the inflation target.
“We took a bigger step today because inflation is now back to the two per cent target and we want to keep it close to the target,” Governor Macklem said in his opening statement.
Canada’s inflation rate fell to 1.6 per cent in September, solidifying forecasters’ expectations for a larger rate cut. Bigger cuts mean the rate can be lowered faster.