The Bank of Canada has decided to lower its interest rate again. This is the second time in a row that the central bank has made this move. The interest rate is now 3.25%, down from its previous level, after five rate cuts this year.
Why did the Bank of Canada do this? It’s because the Canadian economy is showing signs of slowing down. The Bank wants to encourage growth by making it easier for people to borrow money.
The inflation rate has gone back to 2%, which is the Bank’s target. However, other things aren’t looking so great. For example, unemployment in Canada rose in November, and the economy didn’t grow as expected in the third quarter of this year.
The central bank’s goal is to keep the economy stable. Lower interest rates make it cheaper for people to borrow money, like for mortgages and loans, and this can help businesses grow and create jobs.
Even though inflation is under control, the Bank of Canada wants to make sure that it doesn’t fall too far below the target. That’s why they’re continuing to adjust interest rates.
5 FAQs
- Why did the Bank of Canada cut interest rates?The Bank of Canada lowered interest rates to help the economy grow. When borrowing costs are lower, people and businesses can borrow money more easily, which helps increase spending and boost the economy.
- What is the current interest rate?The current interest rate is 3.25%, which is down from previous levels. This is the fifth rate cut this year.
- How does the interest rate affect me?When interest rates are lower, it becomes cheaper for people to borrow money. This means mortgages and loans can cost less, helping people and businesses save money and spend more.
- What’s causing the economy to slow down?The economy is showing signs of slowing down because unemployment is rising and economic growth has been slower than expected. The Bank of Canada is trying to help boost growth with lower interest rates.
- Will the interest rate go lower?The Bank of Canada says they will keep monitoring the situation and decide if further cuts are needed. This will depend on how the economy and inflation behave in the future.
