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MNI BRIEF: Former BOC Governor Sees 1 or 2 More Cuts This Year

OTTAWA (MNI)

The Bank of Canada will lower interest rates once or twice more later this year following last week's quarter-point to cut 4.75% as inflation moves back towards target, former Governor David Dodge said Thursday.

“Like the Bank of Canada, we think Canadian inflation will continue to decline slowly in 2024 and 2025,” Dodge said while giving a webinar for the Bennett Jones law firm where he's now an adviser. Dodge, the Governor from 2001 to 2008, said the BOC will reduce the policy rate further to 3.75% in 2025 "and then to stabilize at a new higher neutral rate of about 3% in 2026."

Canada's policy rate will remain below the Fed's through this year and next as inflation remains stickier in the U.S., Dodge said. (See: MNI INTERVIEW: BOC Seen Cutting Again In Sept-Conference Board)

MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com

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