Bank of Canada keeps interest rates at 4.50 percent

The Bank of Canada (BoC) has kept interest rates stable at 4.50 percent, but continues with its tightening policy, the bank announced on Wednesday. Inflation rates will take time to decrease to the target of two percent, BoC said, as it prepares to raise rates if needed.

“The implied interest rate cuts that are built into the market curve later this year don’t look like the most likely scenario to us, our baseline forecast is for positive but weak growth and declining inflation,” said Tiff Macklem after the policy decision was announced.

BoC has raised its growth forecast this year to 1.4 percent, with inflation rates going down to 5.2 percent. The Canadian dollar is trading 0.1 percent higher, reaching 1.34 against the U.S. dollar.