The Bank of Canada has lowered its key interest rate to 3.75 percent.

The half point drop is the fourth consecutive reduction this year.

The banks followed suit, lowering their prime rates to 5.95 percent.

The Bank continues to expect the global economy to expand at a rate of about 3% over the next two years.

In Canada, the economy grew at around 2% in the first half of the year and the bank is expecting growth of 1.75 percent in the second half.

With inflation now back around the 2% target, the bank decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the one percent to three percent range.

Further cuts are expected if the economy evolves in line with the latest forecast.

The next scheduled update is coming December 11th.

The Bank of Canada will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on January 29, 2025.