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Special Report

Canada Monetary Policy
Research Brief

January 2024

Policy Rate Unchanged in First Decision of
2024 as Bank of Canada Drops Hiking Bias

Central bank maintains policy rate, while turning slightly dovish. In its first policy meeting of 2024, the Bank of Canada held its overnight rate at 5.0 per cent. This marked the fourth consecutive interest rate pause as the BoC stated the economy has now shifted from a position of excess demand to a place of excess supply. Economic growth has stalled since the middle of 2023, consumers have pulled back on spending, and business investment has contracted. Canada’s labour market has also eased, while a slowdown in demand is reducing inflationary pressures. As a result, the central bank dropped its hiking bias by stating that Governing Council’s discussion of monetary policy is shifting from whether the policy rate is restrictive enough to restore price stability to how long it needs to stay at the current level. 

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