Financial News: Bank Of Canada Lowers Interest Rates By A

Bank Of Canada Lowers Interest Rates By A Quarter Point

09/17/2025 - 11:23:00 (RTTNews)

(RTTNews) - After leaving interest rates unchanged for three straight meetings, the Bank of Canada on Wednesday announced its widely expected decision to lower rates by a quarter point.

The Bank of Canada said it decided to reduce its target for the overnight rate by 25 basis points to 2.5 percent, with the Bank Rate at 2.75 percent and the deposit rate at 2.45 percent.

The Canadian central bank's Governing Council said that it determined a rate cut was appropriate to better balance the risks amid signs of weakness in the economy and less upside risk to inflation.

"Looking ahead, the disruptive effects of shifts in trade will continue to add costs even as they weigh on economic activity," the Bank of Canada said. "Governing Council is proceeding carefully, with particular attention to the risks and uncertainties."

The Bank of Canada said it is focused on ensuring that Canadians continue to have confidence in price stability through this "period of global upheaval" and pledged to support economic growth while ensuring inflation remains well controlled.

The decision to lower rates came as Canadian GDP declined by about 1.5 percent in the second quarter, with tariffs and trade uncertainty weighing heavily on economic activity. The bank also noted that Canadian employment has declined in the past two months.

The Canadian central bank acknowledged preferred measures of core inflation have been around 3 percent in recent months but said the upward momentum seen earlier this year has dissipated on a monthly basis.

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