Ottawa: The Bank of Canada decided to hold its interest rate steady at 4.5 percent while the impact of its previous rate hikes filters down through the economy.
The bank’s move was widely anticipated by economists, because the bank had telegraphed its intention to hit pause on rate hikes after raising them eight times between March 2022 and February of this year.
In announcing its policy decision, the bank said it now forecasts the official inflation rate will come down to 3 percent by the middle of this year, and get down to 2 percent target rate by the end of next year.
“Getting inflation down to 3 percent this summer will be welcome relief for Canadians,” Governor Tiff Macklem said at a press conference following the announcement. “But let me assure Canadians that we know our job is not done until we restore price stability.”
In its latest report, Statistics Canada said the country’s inflation rate rose 5.2 percent year over year in February, down 0.7 percentage points from 5.9 percent in January, as it fell below experts’ expectations for the second month in a row.
