Bank of Canada Holds Interest Rates Steady, Citing Slowdown in Inflation

OTTAWA—The Bank of Canada kept its main interest rate unchanged on Wednesday, the first time it has done so in about a year, arguing that economic data point to inflation sharply decelerating this year toward its 2% target.

In its latest policy announcement, the Bank of Canada held its target for the overnight rate at 4.50%, following a quarter-point increase in January. Starting in March of last year, the Bank of Canada raised rates eight times, lifting borrowing costs by 4.25 percentage points to wrestle down historically high inflation. The decision to hold rates steady was based on an assessment of recent data, which showed inflation slowing to below 6% and economic activity stalling in the fourth quarter, the central bank said in a statement explaining its rationale.