No Shifts in Sight: Bank of Canada Holds Interest Rate at 5%
1.5 min read.
In a recent announcement, the Bank of Canada has chosen to maintain the status quo, keeping the key interest rate stable at 5%. This decision reflects the central bank's careful evaluation of the current economic situation and its strategic approach to addressing various challenges. The central bank cites two primary reasons for reaching this decision: a slowdown in the economy during the middle quarters of the year, with a GDP contraction of 0.3 percent in the third quarter, and a rise in the unemployment rate from multi-decade lows.
Despite uncertainties about future rate hikes, the Bank of Canada remains observant. In ordinary circumstances, a statement indicating an economic stall might signal a central bank adopting a wait-and-see approach. However, the Bank of Canada emphasized its continued readiness to raise rates further if necessary. Governor Tiff Macklem-led Governing Council stated, "The Governing Council is still concerned about risks to the outlook for inflation and remains prepared to raise the policy rate further if needed."
Real estate investors are advised to stay vigilant, closely monitor developments, and be prepared for potential changes before entering the market. Making informed decisions is crucial for successful investments.
Reference
Shecter, B. (2023, December 6). Bank of Canada holds interest rate at 5% | financial post. Financial Post. https://financialpost.com/news/economy/bank-of-canada-holds-interest-rate-december-6
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