The Bank of Canada (BoC) on Wednesday reduced its benchmark interest rate by 25 basis points (bps) to 2.5%, citing the “weakening economy and less upside risk to inflation” in its decision.
The central bank also noted in its statement the “disruptive effects of shifts in trade” that will continue to add costs.
BoC Governor Tiff Macklem said in prepared remarks there was “clear consensus” for the rate cut.
The interest rate reduction, which was widely expected by economists, was the BoC’s first cut since March 2025.
The BoC’s statement also removed a reference for a possible need for further cuts that it had included at its July meeting, writing instead that they would be “proceeding carefully”.
The Canada dollar fell to the low of the day against the US dollar to about C$1.3763 following the decision.