The Bank of
Canada (BoC) kept its benchmark interest rates unchanged at 5.00 per cent on
Wednesday, as widely anticipated. It was the Bank's fifth straight meeting on hold. The Canadian
central bank also said it is continuing its policy of quantitative tightening.
In its policy
statement, the Canadian central bank noted:
- Canada’s economy
grew in Q4 by more than expected, although the pace remained weak and below
potential;
- Employment
continues to grow more slowly than the population, and there are now some signs
that wage pressures may be easing;
- Overall, the
data point to an economy in modest excess supply;
- CPI inflation
in Canada eased to 2.9% in January, as goods price inflation moderated further;
- Underlying inflationary pressures persist;
- BoC continues
to expect inflation to remain close to 3% during H1 of 2024 before gradually
easing;
- Governing Council is still concerned about risks to the
outlook for inflation, particularly the persistence in underlying inflation;
- Governing Council wants to see further and sustained
easing in core inflation;
- BoC remains resolute in its
commitment to restoring price stability