Bank Of Canada Leaves Interest Rates Unchanged For Second Straight Meeting

(RTTNews) - The Bank of Canada once again left interest rates unchanged on Wednesday, citing expectations consumer price inflation will continue to ease in the coming months.

Canada's central bank held its target for the overnight rate at 4.50 percent for the second straight meeting after signaling in January that it expects to keep rates at their current level while it assesses the impact of the cumulative rate hikes.

The decision to leave rates unchanged comes as the bank expects consumer price inflation to fall quickly to around 3 percent in the middle of this year from 5.2 percent in February and then decline more gradually to the 2 percent target by the end of 2024.

"Recent data is reinforcing Governing Council's confidence that inflation will continue to decline in the next few months," the Bank of Canada said.

The bank added, "However, getting inflation the rest of the way back to 2% could prove to be more difficult because inflation expectations are coming down slowly, service price inflation and wage growth remain elevated, and corporate pricing behaviour has yet to normalize."

The BoC noted that it remains prepared to raise the policy rate further if needed to return inflation to the 2 percent target.

With regard to the Canadian economy, the bank said growth in the first quarter looks to be stronger than was projected in January, with a bounce in exports and solid consumption growth.