Bank of Canada Inflation Update

March 6, 2024

Bank of Canada Holds Key Interest Rate at 5%

The Bank of Canada announced on Wednesday, April 10, 2024, that it will be holding its target for the overnight lending rate at 5%. This decision comes after careful consideration of the bank's latest inflation forecast. While inflation is still expected to return to the bank's 2% target in 2025, it is now projected to remain at 3% during the first half of 2024 before falling.

The bank also noted that it will lower its policy rate if the economy and inflation meet its projections. However, it warned of inflation risks, citing the war in Ukraine and supply chain disruptions. The bank is committed to taking the necessary actions to bring inflation back to its target.

The Bank of Canada's decision to hold interest rates steady is a sign that it is taking a cautious approach to inflation. While the bank believes that inflation will eventually return to its target, it is also aware of the risks that could prevent this from happening. By holding interest rates steady, the bank is giving itself some room to maneuver in the event that inflation does not fall as expected.

The Bank of Canada's next scheduled rate announcement is on May 2, 2024. The bank will continue to monitor economic and inflation data closely and will make adjustments to its policy rate as necessary.