The Bank of Canada kept its main interest rate at five percent and announced that the necessary economic conditions are in place to cut interest rates. Central Bank Governor Tiff Macklem says economic data since January has increased the central bank's confidence that inflation is slowing, even as economic growth picks up.

He added that although the central bank has seen the necessary evidence to start reducing the interest rate, we need to see the reduction in price pressure for a longer period of time in order to be sure of the continuation of the reduction in inflation. Economists widely expected the central bank to hold interest rates steady and begin the first rate cut in June.

Canada's inflation rate fell to 2.8 percent in February. The Bank of Canada still expects to return to its two percent target by the end of 2025.

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