Bank of Canada Cuts Key Rate by 25 Basis Points to 4.75% on June 5

Jun 5, 2024, 01:48 PM

The Bank of Canada (BoC) has reduced its key policy rate by 25 basis points to 4.75% on June 5, 2024, marking its first rate cut in over four years. This decision aligns with market expectations and reflects the BoC's increased confidence in the easing of underlying inflation. Governor Tiff Macklem indicated that further rate cuts are possible if inflation continues to decline. The BoC's move makes Canada the first G7 country to initiate an interest rate cut in this cycle. The BoC's decision is influenced by recent data showing sustained easing in inflation and the need for less restrictive monetary policy. The BoC has set the Bank Rate at 5% and the deposit rate at 4.75%. The global economy grew by 3% in Q1 2024.