The Bank of Canada (BoC) opted for yet another pause on Wednesday, holding its policy interest rate at 5%.
This marks the second consecutive rate pause from the central bank, one that comes amid increasing affordability struggles and underwhelming economic performance.
"With clearer signs that monetary policy is moderating spending and relieving price pressures, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet," the bank said on Wednesday.
The pause was by no means a surprise, with most economists in agreement in the weeks leading up to today's announcement that the bank would hold off on a hike. Their predictions were fuelled by the fact that Canada's inflation rate slowed to 3.8% in September, bringing it closer to the bank's 2% target, as well as lower demand, particularly in the housing market as sales continued to dip across major markets.
"In Canada, there is growing evidence that past interest rate increases are dampening economic activity and relieving price pressures," the bank's announcement reads.
Despite the pause, the BoC cautioned that Governing Council "is concerned that progress towards price stability is slow and inflationary risks have increased, and is prepared to raise the policy rate further if needed."
"Governing Council wants to see downward momentum in core inflation, and continues to be focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour."
The next rate announcement is scheduled for December 6.
