The Bank of Canada on Wednesday held its target for the policy rate at 5 percent, Paralel.Az reports citing Xinhua.

The central bank said in a news release that the Governing Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation.

The council wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour, according to the release.

In Canada, the economy grew in the fourth quarter by more than expected, although the pace remained weak and below potential. Overall, the data point to an economy in modest excess supply, the release said.

Underlying inflationary pressures persist with year-over-year and three-month measures of core inflation are in the 3 percent to 3.5 percent range, the release said, adding that the bank continues to expect inflation to remain close to 3 percent during the first half of this year before gradually easing.

The bank is continuing its policy of quantitative tightening to normalize the balance sheet, the release said.