The Bank of Canada has decided to keep its benchmark interest rate steady at five per cent, the second straight time the central bank has done so and a sign it may be moving to the sidelines after raising the cost of borrowing 10 times since last year.
The move was widely expected by economists and investors who follow the central bank, after a slew of data points in recent months — from GDP, to jobs, to inflation itself — painted a picture of an economy that was slowing down.
All things being equal, the central bank raises its rate when it wants to slow down an overheated economy, and cuts it when it wants to stimulate borrowing, spending and investment.
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