By Ovunc Kutlu
ISTANBUL (AA) - The Bank of Canada on Wednesday kept interest rates unchanged, and said it continues its policy of quantitative tightening.
The target for the overnight rate was maintained at 5%, with the bank rate at 5.25% and the deposit rate at 5%.
"Global economic growth continues to slow, with inflation easing gradually across most economies," the central bank said in a statement.
It said that Canada's economy has stalled since the middle of 2023 and growth will likely remain close to zero through the first quarter of 2024.
The central bank, however, added that economic growth is expected to strengthen gradually around the middle of this year as household spending would pick up and exports and business investment should get a boost from recovering foreign demand.
"CPI inflation ended the year at 3.4%. Shelter costs remain the biggest contributor to above-target inflation. The Bank expects inflation to remain close to 3% during the first half of this year before gradually easing, returning to the 2% target in 2025," said the statement.
Canada's annual consumer inflation increased to 3.4% in December 2023, from a gain of 3.1% in November. The rate, however, is still significantly lower than the 8.1% figure in June 2022, which was the highest in 39 years.
The bank stressed that its Governing Council wants to see further and sustained easing in core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations and wage growth.