The central bank of Canada announced on Wednesday that it would maintain its key rate at 5%, citing the economic slowdown and a general easing of prices.
However, she suggested that further increases were possible because she remained “concerned” by the inflation outlook. Since July, this key rate has been its highest level in 22 years.
After reaching a peak of 8.1% in June 2022, Canadian inflation continued to fall in October to stand at 3.1% year-on-year.
The institution believes that its current policy “clearly curbs spending, but also that “labor market conditions continue to soften.”
Overall, these data “suggest that the economy is no longer in a situation of excess demand,” underlines the Bank of Canada.
The economic slowdown “reduces inflationary pressures for a growing range of goods and services,” she adds.
The central bank has maintained its key rate at 5% for several months after a dozen increases in 18 months in an attempt to bring Canadian inflation back to around 2%.
The last increase in the Canadian key rate was in July.