BoC Leaves Key Interest Rate Unchanged at 0.25%

Canada’s central bank raises concerns about the potential impacts of recent flooding and the Omicron variant.

The Bank of Canada kept its benchmark overnight interest rate on hold and its forward guidance unchanged, even as it warned that the Omicron variant of Covid-19 had introduced more uncertainty into the country’s economic recovery.

The central bank said Wednesday in a brief statement that recent data suggest the economy had strong momentum going into the fourth quarter, including broad-based job gains that returned the employment rate to around its pre-pandemic level.

However, it raised concerns about the potential impacts of the Omicron variant on future growth and warned that recent flooding in Western Canada, which damaged transportation infrastructure, could represent another setback.