The Bank of Canada is scheduled to hold a monetary policy meeting next week, and in this regard, analysts at RBC Bank pointed out that the Bank of Canada is likely to maintain the interest rate for the second consecutive time despite the economic growth of the past month appearing more resilient than previously expected.

Canadian bank experts continued that the Bank of Canada's halt in raising interest rates at its last meeting was driven by previous estimates that indicated Canada's economic growth would stop until mid-2023. Bank of Canada Governor Macklem said in this regard that for the tightening cycle to resume, it will require accumulating evidence of the country's economic recovery.

Also, the experts noted that the cooler inflation readings are encouraging, especially as policy easing came even before the full impact of the interest rate hikes on household purchasing power appeared.

The recent round of financial instability also served as a reminder that large interest rate increases over the past year can have unexpected consequences. Finally, the experts clarified that inflation and the economy are still in a poor position from the Bank of Canada's point of view to seriously consider cutting interest rates, but staying on the sidelines, i.e., maintaining the current interest rate, seems to be an easy decision.