The Bank of Canada has decided to keep its interest rates unchanged at 5%, along with the Bank Rate at 5¼% and the deposit rate at 5%. This decision aligns with the Bank’s ongoing strategy of gradually reducing the amount of money in circulation.
Looking globally, the economy slowed down in the last quarter of the year. While the US managed to keep up a decent pace of growth, the Euro area struggled, and inflation rates in both regions eased off a bit. Bond yields (interest rates on government loans) have gone up, but companies are finding it easier to borrow money. Stock markets have been doing well, and oil prices have stayed higher than expected.
Back home, Canada’s economy grew more than anticipated in the last quarter, though still slower than it could be. The increase in economic activity was mainly fueled by higher exports, but investment by businesses took a hit. While more people are finding jobs, wage growth has slowed down a bit. Overall, there’s still more supply than demand in the economy.
In January, the cost of living in Canada went up by 2.9%, mainly because of higher prices for things like housing. Despite some prices rising faster than others, the Bank predicts that overall inflation will hover around 3% for the first part of this year before easing off.
The Bank’s decision to keep interest rates steady comes as it continues to keep an eye on inflation and how much demand there is for goods and services compared to how much is available. It wants to make sure that prices stay stable for Canadians.
Here are the upcoming Bank of Canada announcement dates for monetary policy decisions:
- April 10th, 2024
- June 5th, 2024
- July 24th, 2024
- September 24th, 2024
- October 23rd, 2024
- December 11th, 2024
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