Canadian Overnight Repo Rate Average
Bank of Canada Cuts Interest Rate by 25bps
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The Bank of Canada has cut its key interest rate by 25bps to 4.75% in its June 2023 meeting. This marks the second interest rate cut by the Bank of Canada this year, and the third consecutive meeting where the Bank has reduced rates. In its accompanying statement, the Bank noted that the Canadian economy is slowing and that inflation is moderating. The Bank also said it is prepared to cut rates again if necessary to support the economy.
The interest rate cut is good news for borrowers, as it will make it cheaper to borrow money. However, it may also put pressure on banks to reduce savings rates. The interest rate cut is also likely to have a negative impact on the Canadian dollar, as investors may choose to move their money to other countries with higher interest rates.
The Bank of Canada's interest rate cut is a significant event, and it is likely to have a major impact on the Canadian economy. The cut should help to support economic growth, but it may also lead to higher inflation and a weaker Canadian dollar.
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