The Bank of Canada on Wednesday reduced its key benchmark rate by 50 basis points to 3.75%, its first bigger-than-usual move in more than four years, and hailed signs the country has returned to an era of low inflation.

The Bank of Canada delivered a supersized interest rate cut Wednesday in response to the recent decline in inflation, bringing its key policy rate down by half a percentage point. With annual price growth now around two per cent, the central bank says its job has shifted from lowering inflation to maintaining it around the inflation target.