BoC stays the course, no explicit hint on rate cut

BoC maintains overnight rate at 5.00% as widely expected. The central bank’s statement highlighted that both the CPI and core inflation have “eased further” in recent months, though they remain at elevated levels. BoC emphasized its intention to monitor whether the observed “downward momentum is sustained”. But there is no explicit hint on rate cuts.

In its latest economic projections, BoC forecasts GDP growth of 1.5% for 2024, an uptick from previously projected 0.8%. The outlook for the subsequent years also remains optimistic, with growth expected at 2.2% in 2025 (down from previous 2.5%) and 1.9% in 2026.

On the inflation front, BoC projects CPI to hover close to 3% during the first half of this year, with a downward trend anticipated in the latter half to below 2.5%, and reach 2% inflation target in 2025.

Full BoC statement here.