2023-04-12 10:50:01 ET
As expected, the Bank of Canada on Wednesday kept its policy rate unchanged at 4.5% and continued its course of quantitative tightening.
With Canada's labor shortage expected to ease and housing market activity subdued, the bank's Governing Council decided to maintain the policy rate. "Quantitative tightening continues to complement this restrictive stance," the BOC said.
Some areas are showing signs of softening. "U.S. growth is expected to slow considerably in the coming months, with particular weakness in sectors that are important for Canadian exports," it said.
It reiterated that the Bank of Canada is "resolute" in its commitment to restore price stability and it's continuing to asess whether monetary policy is restrictive enough to push down pricing pressures. The council is prepared to hike the policy rate furhter if needed.
Addressing the global economy, the central bank said inflation has eased in many countries, due to lower energy prices, normalizing supply chaines and tighter monetary policy. "At the same time, labor markets remain tight and measures of core inflation in many advanced economies suggest persistent price pressures, especially for services," the BOC said.
The Canadian dollar gained 0.1% to C$1.3454 per U.S. dollar. Before the U.S. CPI report at 8:30 AM ET the loonie had slipped to as much as C$1.349 per greenback.
Invesco CurrencyShares Canadian Dollar Trust ( NYSEARCA: FXC ) rose 0.2% and iShares MSCI Canada ETF ( NYSEARCA: EWC ) gained 0.7% .
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Bank of Canada keeps interest rate unchanged for second straight meeting