Bank of Canada cuts key interest rates in 3rd consecutive drop

The Bank of Canada has reduced key benchmark interest rates Wednesday morning, its third consecutive drop this year.

The bank reduced its target for the overnight rate to 4.25 per cent, with a bank rate at 4.5 per cent and the deposit rate at 4.25 per cent.

These are down from the previous policy rates made in July at 4.5 per cent, 4.75 per cent and 4.5 per cent respectively.

This follows after the bank began cutting interest rates back in June, signaling a turning point in its fight against inflation.

A statement was released ahead of a press conference at 10:30 a.m., outlining the continuation of it’s policy of “balance sheet normalization,” which can be found here.

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The statement reads that the bank’s governing council decided to reduce the policy interest rate by another 25 basis points, after seeing the country’s inflation rate lowering by 2.5 per cent in July.

The bank remarks that the Canadian dollar appreciated modestly, largely reflecting a lower U.S. dollar, with oil prices lower than forecast in the July report.

The Crown corporation said that the country’s economy grew by 2.1 per cent in this year’s second quarter while the global economy’s expansion of about 2.5 per cent.

The bank is scheduled to announce its next overnight rate target on October 23.