The Bank of Canada (Reserve Bank) has trimmed its Policy Rate by 0.25% to 4.75%. It’s the first G7 country to cut interest rates in this cycle.
The BoC Policy Rate followed a very similar trajectory to the Reserve Bank of Australia Cash Rate. BoC went from 0.25% in March 2022 to a peak of 5%. RBA went from 0.10% in March 2022 to 4.35% today.
Why is this important to Australia? Canada is economically pretty similar to Australia and sits in the G7 group. This rate move helps set the tone for future global interest rate movements. The RBA will take note of this.