Bank of Canada cuts key interest rate to 4.75%

The Bank of Canada has cut its overnight rate by 25 basis points, a move not seen since the beginning of the pandemic.

This announcement brings the policy rate down to 4.75 per cent, marking a notable dip from the steady 5 per cent it held since July last year.

Back in March 2022, the bank began raising its key interest rate after larger-than-expected inflation numbers that followed a period of pandemic stimulus and disrupted global supply chains.

"We've made significant strides in taming inflation," declared Bank of Canada Governor Tiff Macklem. "And our confidence in inching closer to the 2 per cent target has surged in recent months."

However, Macklem warned that risks to the inflation outlook remain and that the decision on further rate cuts will be made one meeting at a time. "Rushing to lower our policy interest rate could undo our hard-won progress. The path to curbing inflation further is bound to be bumpy, with lingering risks."

The next rate announcement is scheduled for July 24.