The Bank of Canada kept its overnight rate target steady at 5%

On April 10, 2024, the Bank of Canada made significant announcements regarding its monetary policy. Let’s break it down:

1. Interest Rate Decision:

   • The Bank of Canada maintained its target for the overnight rate at 5%¹.
   • This rate influences borrowing costs and overall economic activity.

2. Quantitative Tightening:

   • The central bank is continuing its quantitative tightening measures.
   • Quantitative tightening involves reducing the size of the central bank’s balance sheet by selling assets (such as government bonds) that it had previously purchased during quantitative easing.

3. Monetary Policy Report (MPR):

   • Alongside the rate decision, the Bank of Canada published its quarterly MPR².
   • The MPR provides insights into the bank’s assessment of the economy, inflation, and future policy direction.

4. Inflation Outlook:

   • The bank acknowledges that inflationary pressures are gradually easing.
   • However, it emphasizes that it will take more time to determine if this progress is sustainable¹.

In summary, the Bank of Canada is maintaining its cautious stance, closely monitoring economic indicators, and adjusting policy as needed to support stable growth and manage inflation risks. 🇨🇦💰📈