(Ottawa) The Bank of Canada does not know exactly when it will be able to start lowering interest rates, because it continues to fight against inflation that is still too high and widespread, we can learn in the summary of its deliberations which led to its January 24 rate decision.
“The members (of the governing council) considered that further increases in the key rate could not be ruled out in the event of new unforeseen inflationary surges. They were, however, of the view that their future discussions on monetary policy would probably focus more on determining how much longer the policy rate should be maintained at 5% to support the disinflation process,” the central bank said in the summary of his discussions.
“They recognized that, based on the information available, it was difficult to predict when it would be appropriate to begin lowering interest rates. »
In late January, the central bank kept its key rate at 5%, giving higher interest rates more time to slow the economy and ease price pressures.
Inflation has slowed significantly over the past 18 months, reaching 3.4% in December, but the summary of deliberations notes that prices of many goods and services continue to rise at an unusually rapid rate.
“The prices of just over half of the components of the Consumer Price Index rose at a rate above 3%, indicating that the drivers of excessive inflation remained widespread,” we can read in the document.
Financial markets expect the Bank of Canada to begin cutting interest rates as early as April.