The Bank of Canada reduced key interest rates by 25 basis points to 4.25%, the central bank announced in a statement on Wednesday.
The institution explained that it made the decision because the Canadian economy grew 2.1% in the second quarter, a stronger growth than the bank had projected. Additionally, the country's inflation slowed down, landing at 2.5% in July.
"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. Monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook. The Bank remains resolute in its commitment to restoring price stability for Canadians," the central bank said.
