Bank of Canada Set to Reveal Interest Rate Verdict Today, Anticipated to Maintain Key Rate at 5%

This morning, the Bank of Canada is poised to announce its interest rate decision.

Despite indications of cooling inflation, economists widely anticipate the central bank to uphold its key interest rate at five percent.

In January, Canada’s inflation rate dipped to 2.9 percent, reflecting a moderation in price pressures across various sectors of the economy.

The Bank of Canada has emphasized its preference for sustained decreases in inflation before considering rate adjustments.

Projections suggest the central bank may initiate interest rate reductions around the midpoint of the year.

The deceleration in the Canadian economy is projected to facilitate interest rate reductions by exerting downward pressure on price growth.

The Bank of Canada held its benchmark interest rate at 5 per cent, a move widely expected by economists even as the central bank makes progress on tamping down inflation.

The decision marks the fifth consecutive time that the central bank has held its key rate at 5 per cent.

Inflation in January slowed more than economists expected, with prices rising 2.9 per cent annually, within the Bank of Canada’s target range of between one and three per cent. The central bank’s core measures of inflation also slowed in January, a sign that price pressures are easing.

While progress has been made on slowing inflation, the central bank flagged in a statement released alongside its decision that “underlying inflationary pressures persist,” highlighting that measures of core inflation are still in the 3 to 3.5 per cent range, and that the share of components in the Consumer Price Index that are growing above 3 per cent declined, but remains above the historical average