The Bank of Canada has decided to maintain its key rate at 5% for a third consecutive time in order to continue its efforts in the fight against inflation.
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The Bank of Canada (BoC) says economic growth in the country stagnated in the second and third quarters of 2023, that higher interest rates “clearly” curbed spending and that pressure on prices has diminished.
“This reduction in pressures, combined with the fall in gasoline prices, contributed to the decline in inflation […]. However, the increase in housing costs has increased, reflecting the faster growth of rents and other housing costs, as well as the continued contribution of high mortgage interest,” we read in a press release.
Even though it decided to maintain its key rate at 5%, the Bank of Canada said it was “concerned about the risks surrounding the inflation outlook” and remains ready to increase the key rate again “if necessary.”
“The global economy continues to slow down and inflation has fallen further,” the BoC also said.
Remember that since July 12, 2023, after two consecutive quarter-point increases, the Bank of Canada has decided to maintain its key rate at 5%. The next update will be on January 24, 2024.