READ: Bank of Canada's rate announcement statement
BNN Bloomberg
The Bank of Canada announced it was holding steady on its rate hiking cycle on Wednesday, keeping its key interest rate at 4.5 per cent.
The Bank of Canada today held its target for the overnight rate at 4.5 per cent, with the Bank Rate at 4.75 per cent and the deposit rate at 4.5 per cent. The Bank is also continuing its policy of quantitative tightening.
Inflation in many countries is easing in the face of lower energy prices, normalizing global supply chains, and tighter monetary policy. At the same time, labour markets remain tight and measures of core inflation in many advanced economies suggest persistent price pressures, especially for services.
Global economic growth has been stronger than anticipated. Growth in the United States and Europe has surprised on the upside, but is expected to weaken as tighter monetary policy continues to feed through those economies. In the United States, recent stress in the banking sector has tightened credit conditions further. U.S. growth is expected to slow considerably in the coming months, with particular weakness in sectors that are important for Canadian exports. Meanwhile, activity in China’s economy has rebounded, particularly in services. Overall, commodity prices are close to their January levels. The Bank’s April Monetary Policy Report (MPR) projects global growth of 2.6 per cent this year, 2.1 per cent in 2024, and 2.8 per cent in 2025.
