The Bank of Canada (BoC) released its interest decision on Wednesday. The BoC lowered its interest rate to 0.75% from 1.0%. That was the first interest rate reduction since April 2009.

The BoC's interest rate had been at 1.0% since September 2010.

The central bank said that it responded to falling oil prices which will be negative for growth and inflation. Crude oil prices dropped more than 55% since last June.

"The oil price shock increases both downside risks to the inflation profile and financial stability risks", the central bank noted.

The BoC also cut it growth forecasts. Canada's economy is expected to grow by 1.5% in the first half of 2015, down from its previous estimate of 2.4%. The growth for 2015 was lowered to 2.1% from 2.4%.

The central bank expects to reach full capacity to the end of 2016.

Inflation is expected to be below the BoC' target range of 1 to 3% for most of 2015.