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Special Report

Canada Monetary Policy
Research Brief

March 2024

Bank of Canada Maintains Policy
Rate in Widely Expected Move

Bank remains tight-lipped. Canada’s central bank held its overnight rate at 5.0 per cent for the fifth consecutive meeting and continued quantitative tightening. In the Bank of Canada’s communications, while giving little away, it did appear to be gaining more confidence that inflation is moving in the right direction. The Bank cited that the economy grew in the fourth quarter by more than it expected, but the pace remained weak and below potential. The labour market was also mentioned, with the Bank stating that employment continues to grow more slowly than the population, and there are now signs that wage pressures may be easing. Altogether, the BoC reiterated that the economy is operating in a position of excess supply. However, despite these signs of a slowing economy — along with inflation returning to the Bank’s target range in January — the monetary authority is still concerned about overall price pressures.

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