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Bank of Canada closer to being able to cut rates, Macklem says

FILE PHOTO: The Bank of Canada building is pictured in Ottawa

OTTAWA (Reuters) -The Bank of Canada is getting closer to being able to start cutting interest rates from their current 23-year highs, Governor Tiff Macklem said on Wednesday.

In testimony to the Senate banking committee, Macklem said inflation was coming down and Canadians wanted to know when the central bank would start cutting interest rates.

"The short answer is we are getting closer," he said.

Canada's annual inflation rate was 2.9% in March, a little higher than the previous month. The Bank of Canada has a 2% inflation target.

Inflation has stayed under 3% since January and is in line with the central bank's forecast for it to remain near that level in the first half of 2024, with closely watched core measures of consumer prices also easing persistently.

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"We are seeing what we need to see, but we need to see it for longer to be confident that progress toward price stability will be sustained," Macklem said.

(Reporting by Promit Mukherjee; editing by David Ljunggren and Paul Simao)