The Bank of Canada has announced a 0.25% cut in its interest rate, lowering it to 4.25% from 4.50%. This is the third time in a row that BOC would reduce its rates.
In a statement on Sept. the Bank of Canada said that its rate cut is due to the cooling of inflation in the country. But while the overall price increases are slowing down, some areas like housing and services are still experiencing high costs.Â
The Bank said it will keep a close eye on these trends and adjust rates based on the new data about inflation.
With continued easing in broad inflationary pressures, the Governing Council decided to reduce the policy interest rate by a further 25 basis points. Excess supply in the economy continues to put downward pressure on inflation, while price increases in shelter and some other services are holding inflation up. Governing Council is carefully assessing these opposing forces on inflation.
BOC’s governor, Tiff Macklem reassured that the Bank aims to keep inflation near its 2% target while avoiding a scenario where a weak economy will lead to a rapid decline in rates.
Moreover, the Canadian economy grew in the second quarter of 2024, supported by government spending and business investment, which aligns with the Bank’s forecasts.
Following the announcement, Bitcoin saw a quick spike surging from $56,398 to $58,510. At the time of writing, the cryptocurrency is trading at $58,041.
Some investors believe that the rate cuts might lead to positive developments. According to previous reports, analysts at Citi said that the U.S. Federal Reserve might also reduce interest rates, which could encourage more investment in cryptocurrencies.
Also Read: SEC Delays Decision to Approve Eco-friendly Bitcoin ETF
