Interest rate stays at 4.5%
Despite somewhat muddled economic data, the Bank of Canada has decided to hold off on another rate hike for now
By Rob Roach, ATB Economics 8 March 2023 1 min read
After eight consecutive increases, the Bank of Canada announced* this morning it is keeping its trend-setting policy interest rate at 4.5%.
The decision was based on the argument that “the latest data remains in line with the Bank’s expectation that CPI inflation will come down to around 3% in the middle of this year.”
Today’s announcement says that the Bank’s “Governing Council will continue to assess economic developments and the impact of past interest rate increases, and is prepared to increase the policy rate further if needed to return inflation to the 2% target.”
While welcome news for borrowers, concerns have been raised that the Canadian dollar could lose more ground if the U.S. Federal Reserve continues to increase its benchmark rate due to better-than-expected economic data south of the border.
*Each year, the Bank of Canada sets eight fixed dates on which it announces whether or not it will change its policy interest rate. The next announcement is scheduled for April 12, 2023.
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