BANK OF CANADA'S KEY INTEREST RATE REMAINS UNCHANGED -- FOR NOW
Mar 08, 2023
By Bob Komsic
As many expected, the Bank of Canada will keep its key interest rate right where it is, at 4.5%, for the time being.
It’s the first time in over a year that the central bank has decided not to hike it.
The bank is confident in standing pat because there’s growing financial evidence that inflation is starting to cool.
There was no economic growth in the last quarter of 2022 and inflation slipped to 5.9% in January.
However, the Bank of Canada is reiterating its wait-and-see approach.
”[The bank] 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 to the two per-cent inflation target,” the bank said.
A major factor of course is what’s happening south of the border, where the U.S. Federal Reserve suggests future rate hikes are possible.
”If … the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” Fed chair Jay Powell told a congressional committee, ahead of the American central bank’s rate decision next week.