Central Bank of Canada maintains interest rates at 5%

Canadas central bank cuts interest rates to 5

(Tiper Stock Exchange) – The Canadian Central Bank today announced the retention of interest rates unchanged: the overnight rate at 5%, the interbank rate at 5.25% and the deposit rate at 5%. At the same time the Central Bank maintained its policy of quantitative restriction.

The Governing Council still says “worried for the persistence of inflationary pressures and is ready to raise the interest rate further official, if necessary” and ensure that “will continue to evaluate the dynamics of inflation basically and the outlook for inflation”, he said “resolute in its commitment to restore price stability”.

The decision was made by the Board in consideration of the inflation dynamicswhich has continued to shrink, though that core you confirm still high. Global growth slowed in the second quarter of 2023, largely reflecting a significant deceleration in China. In this framework, the Canadian economy has entered a weaker growth periodneeded to relieve price pressure.

The growth of household credit has slowed down as the impact of higher rates has limited real estate transactions. There internal question grew by 1% in the second quarter, supported by public spending and from investments of businesses. Tensions on the labor market continued to gradually ease. However, the wage growth she stayed around at 4%-5%.

Recent data on the consumer price index indicate that the inflationary pressures remain widespread. After falling to 2.8% in June, CPI inflation rose to 3.3% in July, averaging close to 3%, in line with Bank projections. With the recent rise in petrol prices, inflation is expected to be higher in the near term before easing again. Core inflation stands at higher levels around 3.5%.