The Bank of Canada (BoC) has decided to keep its target for the overnight rate at 5 per cent, the bank rate at 5.25 per cent, and the deposit rate at 5 per cent.

The decision came on Wednesday morning and was the second of this year.

Canada's central bank held the key interest rate at 5 per cent in the last update in January, following three consecutive rate holds in 2023.

Bank of Canada maintains policy rate, continues quantitative tighteninghttps://t.co/1oZYh7lrBi#economy #cdnecon

— Bank of Canada (@bankofcanada) March 6, 2024

The Bank said it is "continuing its policy of quantitative tightening."

Canadians saw seven interest rate hikes in 2022. In January 2023, another increase followed, bringing the key rate to 4.5 per cent.

The Bank held its key rate at 4.5 per cent — precisely as experts predicted — until June 7, when it was raised to 4.75 per cent. On July 12, the BoC brought the key rate to 5 per cent, with the bank rate at 5.25 per cent, and on September 6, it announced that it was holding those rates. It has since only announced rate holds.

In a recent report, Oxford Economics researchers said they believe the 5 per cent key rate will be held until the middle of 2024, when the BoC will trigger a cycle that lowers the rate.

"Consumer Price Index (CPI) inflation eased to 2.9 per cent in January, as goods price inflation moderated further. Shelter price inflation remains elevated and is the biggest contributor to inflation," the BoC shared.

"Underlying inflationary pressures persist: year-over-year and three-month measures of core inflation are in the 3 per cent to 3.5 per cent range, and the share of CPI components growing above 3 per cent declined but is still above the historical average. The Bank continues to expect inflation to remain close to 3 per cent during the first half of this year before gradually easing."

The next overnight rate announcement will come on April 10, 2024.