OTTAWA, Dec. 6 (Xinhua) -- The Bank of Canada on Wednesday held its policy rate for the third time at 5 percent.
The central bank said in a press release that with further signs that monetary policy is moderating spending and relieving price pressures, the bank's Governing Council decided to hold the policy rate.
Economic growth in Canada stalled through the middle quarters of 2023 and real GDP contracted at a rate of 1.1 percent in the third quarter, the bank said, noting that higher interest rates are clearly restraining spending with consumption growth in the last two quarters close to zero.
The labor market continues to ease and the economy is no longer in excess demand, the bank said.
The slowdown in the economy is reducing inflationary pressures in a broadening range of goods and services prices. Combined with the drop in gasoline prices, this contributed to the easing of CPI inflation to 3.1 percent in October, the bank said, adding that in recent months, the core inflation data have been around 3.5-4 percent with the October data coming in towards the lower end of this range.
The Governing Council is still concerned about risks to the outlook for inflation and remains prepared to raise the policy rate further if needed, the Bank of Canada said. ■