The Bank of Canada kept the key interest rate steady at 5% in its latest decision until 2023

The Bank of Canada once again kept its key interest rate steady at five percent on Wednesday, as evidence showed that higher interest rates have helped dampen inflation. "High interest rates have clearly constrained spending, consumption growth has been close to zero in the past two quarters, and business investment has fluctuated but been essentially flat over the past year," the central bank said in a statement. The central bank added that the weak growth of the economy and the cooling of the labor market show that the demand no longer exceeds the supply in the economy.

This is the third time in a row that the Bank of Canada has decided to keep its key interest rate unchanged. Forecasts show that the next action of the central bank is to reduce the interest rate. However, the central bank has not yet ruled out an interest rate hike in the future.

The rate of inflation decreased significantly during the last year and reached 3.1% in October. The Bank of Canada predicted in October that inflation would reach its 2% target in 2025.

The central bank's next decision on interest rates is set for January 24.

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