Bank of Canada holds key interest rate steady at five per cent

Canada’s central bank held its key interest rate on Wednesday.

The Bank of Canada maintained the rate at five per cent, marking the third time in a row that the central bank has left the rate unchanged.

In a statement, the bank said higher interest rates are working to restrain spending, noting that business investment has largely been flat over the past 12 months while consumption growth was also close to nil over the past two quarters.

The bank has argued that restricting spending is necessary in order to bring stability back to prices.

Inflation reached 3.1 per cent in October, while Canada’s economy shrunk by 1.1 per cent in the third quarter on an annualized basis.

But while many are expecting the next announcement from the bank to include a rate cut, the institution left the door open for future increases as well.

The bank’s next rate decision is expected on Jan. 24.

– With files from The Canadian Press