Canada's central bank decides to maintain key lending rate at five percent
Date
12/7/2023 7:28:58 AM
(MENAFN) On Wednesday, Canada's central bank decided to maintain its key lending rate at five percent, attributing this decision to the global economic deceleration and the alleviation of inflationary pressures.
However, the Bank of Canada has not ruled out the possibility of future rate hikes, indicating that it remains "still concerned about risks" to the long-term outlook for prices.
“With further signs that monetary policy is moderating spending and relieving price pressures, Governing Council decided to hold the policy rate at 5 percent,” the Bank of Canada stated in a declaration.
The bank has maintained its benchmark interest rate at five percent for several months, following nearly a dozen increases over an 18-month period in an effort to bring inflation back to its target of two percent.
Canada's benchmark rate, a G7 nation, has been at its highest level in 22 years since July.
Although inflation in Canada peaked at 8.1 percent in June 2022, it has gradually decelerated, reaching 3.1 percent in October.
The Bank of Canada stated that its existing monetary policy is "clearly restraining spending."
The data “suggest the economy is no longer in excess demand,” the central bank noted, continuing that the financial stoppage has declined price pressures for a number of goods and services.
The bank also highlighted that the labor market in the country "continues to ease," as job creation lags behind the growth in the workforce, resulting in a decrease in the number of vacancies.
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