For the first time in four years, the Bank of Canada cut its key interest rate by 25 basis points.
The rate is now 4.75 per cent, down from 5 per cent.
Governor Tiff Macklem said the Bank of Canada has confidence inflation will continue to move closer to the 2 per cent target.
"If inflation continues to ease, and our confidence that inflation is headed sustainably to the 2% target continues to increase, it is reasonable to expect further cuts to our policy interest rate. But we are taking our interest rate decisions one meeting at a time," said Macklem.
In his remarks prior to a scheduled news conference, Macklem said their confidence comes from many factors including the easing of the total consumer price index and an increase in business investment and housing activity.
