By Ketki Saxena
Investing.com – The Bank of Canada has announced that it will hold its benchmark policy rate at 4.5%, in a move that had been widely expected by economists.
After hiking interest rates 8 consecutive times over the past year, the Canadian central bank will now hold its policy rate at the current level, citing signs that core inflation has peaked and that monetary policy is beginning to work as it trickles its way through the economy.
However, the bank’s governing council also said at that time that it’s prepared to further raise rates if needed to reach its targeted 2% target.
The Canadian central bank had signaled a “conditional pause” at its previous policy meeting in January, indicating that any further moves would be guiding by incoming data.
Incoming data since then has included GDP growth of 0% in Q4, headline inflation that cooled to 5.9% (the first time since February 2022 the inflation rate ticket in below 6%, and a blockbuster jobs reported (150 K jobs added in January) that economists had suggested may lead the Bank of Canada to lower its bar for raising interest rates once more.