By Ovunc Kutlu
ISTANBUL (AA) - The Bank of Canada announced Wednesday it reduced policy rate by 25 basis points, the first rate cut in more than four years.
The target for the overnight rate was lowered to 4.75%, with the bank rate at 5% and the deposit rate at 4.75%.
The move is the first rate cut by the central bank since March 2020 when it lowered the policy rate by 25 basis points as a response to the economic conditions caused by the coronavirus pandemic.
"The global economy grew by about 3% in the first quarter of 2024," the bank said in a statement. "In Canada, economic growth resumed in the first quarter of 2024 after stalling in the second half of last year."
The bank said Canada's economy grew at 1.7% in the first quarter of this year growth, which was slower than its forecast, but noted that consumer prices eased further to 2.7% in April.
"Recent data has increased our confidence that inflation will continue to move towards the 2% target," the central bank said.