Bank Of Canada Keeps Interest Rate Unchanged To 5% For Forth Consecutive Time

The Bank of Canada declared that it will uphold its key overnight interest rate at five percent, maintaining its benchmark without alteration for the fourth consecutive time.

This anticipated announcement aligns with predictions made by numerous economists, marking the central bank’s commitment to the current interest rate level since its last increase in July 2023.

During a press conference on Wednesday morning, Tiff Macklem, the governor of the central bank, indicated a noteworthy shift in focus. Rather than deliberating on the adequacy of the bank’s policy-setting interest rate, discussions are now centered on determining the optimal duration for maintaining the “current restrictive stance” of a heightened interest rate.

While acknowledging a potential change in messaging, the bank has not hinted at an imminent decrease in interest rates, citing ongoing concerns regarding inflation.

Macklem acknowledged the recent decline in inflation due to heightened interest rates implemented by the Bank of Canada, contributing to a slowdown in the economy. However, he emphasized that inflation remains unacceptably high, citing persistent inflationary pressures.

Despite not ruling out the possibility of future rate hikes in response to rising inflation, Macklem expressed that if the economy aligns with current projections, discussions about an interest rate hike are not expected.

Anticipating upcoming deliberations, Macklem stated, “I expect future discussions will revolve around the duration of maintaining the policy rate at five percent.”

Over the past year, the inflation rate in Canada experienced a decline, followed by an upward trend in December. The Bank of Canada’s forecasts project a return to its targeted inflation rate of approximately two percent by the year 2025.

Parvasi Media Group