For the fifth consecutive time, the Bank of Canada has chosen to hold its overnight lending rate at its current level of 5%.

In its scheduled interest rate announcement for March 6th, Canada’s central bank declared that it would hold the policy rate at 5% and “continue to normalize the Bank’s balance sheet.”

Although the annual rate of inflation fell to 2.9% in January, the Bank pointed to underlying inflation factors, such as shelter costs, as justification for keeping rates where they are. In its announcement, the BoC stated that it would like to see further easing of inflation and price stability in the economy before it begins making cuts.



“In the six weeks since our January decision, there have been no big surprises. Economic growth has remained weak, and inflation has eased further as higher interest rates restrain demand and relieve price pressures. But with inflation still close to 3% and underlying inflationary pressures persisting, the assessment of Governing Council is that we need to give higher rates more time to do their work,” said Tiff Macklem, Governor of the Bank of Canada, in a press conference following the Bank’s decision.

When will interest rates come down?

Though there has been no cut to the overnight lending rate in almost four years, economists anticipate that the BoC will begin to reduce rates later this year – possibly in its scheduled June announcement – if inflation reduces further towards the central bank’s target of 2%. 

The Bank of Canada will make its next announcement on April 10th, 2024.

Read the full March 6th report from here.