Bank of Canada Cuts Key Interest Rate by 25 Basis Points to 4.75% on June 5, First in Four Years

Jun 5, 2024, 01:45 PM

The Bank of Canada has reduced its key interest rate by 25 basis points to 4.75% on June 5, marking the first rate cut in more than four years. This decision aligns with the expectations of a majority of economists and market analysts, who had predicted the rate cut due to easing inflationary pressures. Governor Tiff Macklem indicated that it is reasonable to expect further cuts if inflation continues to ease. The decision makes Canada the first G7 country to initiate an easing cycle. The Canadian dollar weakened by 0.2% to 1.3711 per U.S. dollar following the rate cut. A Reuters poll showed that 82% of economists expected this cut, and three further cuts are anticipated this year.