The announcement arrives at an important moment for the Canadian economy
The Bank of Canada has announced no change to its benchmark interest rate in its April decision, leaving that key rate untouched for a second consecutive month as it continues a careful pivot away from its rate-hiking trajectory of the past year.
The central bank revealed that it would keep the trendsetting interest rate, which heavily influences variable mortgage rates in Canada, at its current level of 4.5% in a further sign that it believes the heavy lifting has been done in efforts to cool the economy and battle inflation.
That decision had been widely expected. A poll of leading Canadian economists by Reuters last week revealed that a majority anticipated the Bank would hold its policy rate steady in this announcement – and leave it unchanged for the remainder of the year – with a small minority even suggesting that a rate cut could be in the cards by the end of 2023.
The Bank opted to stay the course on interest rates despite some indications that the Canadian economy continues to operate at a faster clip than expected, including a labour market report that signalled the addition of 35,000 new jobs last month.
Still, the central bank will have been buoyed by news that inflation is continuing a steady descent since hitting a 39-year high last June. The consumer price index, which measures yearly price growth across a range of different sectors, sat at 5.2% in March, well below its 8.1% reading last summer.
The Bank of Canada is scheduled to make its next decision on interest rates on June 12.
