Bank of Canada keeps interest rates unchanged

The Bank of Canada on Wednesday kept interest rates unchanged, and said it continues its policy of quantitative tightening.

The target for the overnight rate was maintained at 5%, with the bank rate at 5.25% and the deposit rate at 5%.

"The global economy is slowing and growth is forecast to moderate further as past increases in policy rates and the recent surge in global bond yields weigh on demand," the central bank said in a statement.

The bank said it estimates the global economy to grow 2.9% this year, 2.3% in 2024 and 2.6% in 2025, noting that the US economy is proving to grow stronger, while economic activity in China is weaker than expected and growth in the euro area has slowed further.

"Inflation has been easing in most economies, as supply bottlenecks resolve and weaker demand relieves price pressures. However, with underlying inflation persisting, central banks continue to be vigilant. Oil prices are higher than was assumed in July, and the war in Israel and Gaza is a new source of geopolitical uncertainty," it added.