Business

Central bank keeps trendsetting rate steady for 4th consecutive time


Posted: 1 Hour Ago
Last Updated: 46 Minutes Ago

Tiff Macklem is leaving the Bank of Canada’s influential interest rate at 5% for the time being. (Adrian Wyld/The Canadian Press)

The Bank of Canada has announced its key overnight interest rate will remain at five per cent, keeping its benchmark the same for the fourth time in a row.

Today’s announcement was predicted by many economists. The central bank last raised interest rates in July 2023.

In remarks published on Wednesday morning, the central bank’s governor, Tiff Macklem, said discussions are shifting at the Bank of Canada from whether its influential policy-setting interest rate is high enough to how long the bank’s “current restrictive stance” needs to be in place.

While Macklem said the bank has not ruled out further rate increases if inflation rises, he also said if the economy “evolves broadly in line” with their current projections, he does not expect an interest rate hike to be discussed.

The Bank of Canada is expecting inflation to reach its targets by 2025; the central bank’s goal is that inflation hover around two per cent. It hasn’t come down to that target yet.

The central bank’s interest rate influences the cost of debt for Canadians taking out variable-rate loans and mortgages, and can also affect the interest rates on some savings accounts.

(Adrian Wyld/The Canadian Press)

ABOUT THE AUTHOR

Anis Heydari

Senior Reporter

Anis Heydari is a senior business reporter at CBC News. Prior to that, he was on the founding team of CBC Radio’s “The Cost of Living” and has also reported for NPR’s “The Indicator from Planet Money.” He’s lived and worked in Edmonton, Edinburgh, southwestern Ontario and Toronto, and is currently based in Calgary. Email him at anis@cbc.ca.