Double Cut in Canada's Interest Rate

Canada's central bank is making a so-called double cut in the interest rate, down by 0.50 percentage points to 3.25 percent. The announcement was in line with expectations.

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Double Cut in Canada's Interest Rate
Photo: Sean Kilpatrick AP/TT

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The interest rate in Canada is thus in the upper range of the interest rate levels that the central bank describes as neutral, i.e., those that are deemed neither to stimulate nor to restrict the economy.

The interest rate decision suggests that the double rate cut will be followed by smaller rate cuts in 2025.

The Canadian dollar rose slightly against the US dollar after the decision, while Canadian market interest rates fell a few points.

With Wednesday's cut, Canada's central bank has lowered the interest rate by a total of 1.75 percentage points over five meetings, making the bank one of those that have moved fastest to dismantle the restrictive interest rate levels introduced during the inflation shock of 2022-2023.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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