Investing.com - The Bank of Canada cut its benchmark interest rate in a surprise decision in January, in a bid to boost inflation and stimulate growth, it announced on Wednesday.
The BoC said it was lowering its overnight cash rate by 25 basis points to 0.75% from 1.00% in a surprise decision.
The bank said in a statement that the move was in response to the recent sharp drop in oil prices, which will be negative for growth and underlying inflation in Canada.
The BoC added that the economy is expected to return to full capacity around the end of 2016, a little later than was expected in October.
BoC Governor Stephen Poloz was to comment on the decision at a press conference later in the day.
USD/CAD was trading at 1.2257 from around 1.2067 ahead of the announcement.