BoC’s interest rates unchanged citing inflation falling as forecast

The Bank of Canada on Wednesday left its key overnight rate on hold at 4.50%, as expected, becoming the first major central bank to suspend its monetary tightening campaign in the face of an anticipated easing of high inflation.

Over the past year, the Canadian central bank raised rates eight times in a row by a total of 425 basis points to tame inflation, which peaked at an annualized rate of 8.1% last year and slowed to 5.9% in January, still almost three times the Bank of Canada’s 2% target.

When the BoC last met to set policy in January, it announced a 25-basis-point hike and said it wanted to leave rates unchanged for a while to let previous increases sink in, as long as prices slowed in line with its expectations.