The Bank of Canada announced today that it will continue to hold its key interest rate steady at 4.5 per cent, as was widely anticipated by economists.

The central bank says recent data is reinforcing its confidence that inflation will continue to fall in the coming months.

Canada’s annual inflation rate fell to 5.2 per cent in February, marking the second month in a row it came in lower than forecast.

The Bank of Canada continues to expect the inflation rate to fall to three per cent by mid-year and back down to its target of two per cent by the end of 2024.

With growth coming in stronger than anticipated this year, the central bank has bumped up its growth forecast for 2023, while revising it down for 2024.

The Bank of Canada says it will continue to assess whether interest rates are high enough to bring inflation back to target, keeping the door open to more rate hikes if necessary.