Bank of Canada holds key rate for first time in a year

OTTAWA — The Bank of Canada is holding its key interest rate steady for the first time in a year while reiterating it is taking a wait-and-see approach with monetary policy.

The central bank says it has decided to hold its key rate at 4.5 per cent based on its assessment of recent economic data.

However, it is keeping the door open to further rate hikes if the economy or inflation run hotter than expected.

In January, the Bank of Canada announced it expected to maintain its key interest rate if economic developments stay broadly in line with its forecasts.

Recent data showed inflation slowed to 5.9 per cent in January while the economy posted no growth in the fourth quarter.

The Bank of Canada says it still expects the annual inflation rate to fall to around three per cent by mid-year.