Canada's inflation rate decreased to two per cent in August, Statistics Canada reported on Tuesday, finally hitting the Bank of Canada's target in its long campaign to cool price growth.

Canadian inflation matched the central bank’s target last month for the first time in more than three years, smoothing the road for further cuts in interest rates.

Canada's annual inflation rate reached the central bank's target in August at it cooled to 2 per cent, its lowest level since February 2021, data showed on Tuesday.