By Ovunc Kutlu
ISTANBUL (AA) - The Bank of Canada announced Wednesday it reduced its policy rate by 25 basis points to 4.25%, marking the third rate cut in more than four years.
The target for the overnight rate was lowered to 4.25%, with the bank rate at 4.5% and the deposit rate at 4.25%.
The move is the third rate cut by the central bank since March 2020 when it lowered the policy rate by 25 basis points in response to economic conditions caused by the coronavirus pandemic.
"The global economy expanded by about 2.5% in the second quarter," the bank said in a statement. "In Canada, the economy grew by 2.1% in the second quarter, led by government spending and business investment.
"This was slightly stronger than forecast in July, but preliminary indicators suggest that economic activity was soft through June and July," it added. "The labour market continues to slow, with little change in employment in recent months. Wage growth, however, remains elevated relative to productivity."