OTTAWA, Jan. 24 (Xinhua) -- The Bank of Canada on Wednesday held its target for policy rate at 5 percent.

       The bank's discussion of monetary policy is shifting from whether the policy rate is restrictive enough to restore price stability, to how long it needs to stay at the current level, said Governor Tiff Macklem in a press conference to announce the policy interest rate.

       Inflation is coming down as higher interest rates restrain demand in the economy. But inflation is still too high, and underlying inflationary pressures persist, Macklem said.

       "We need to give these higher rates time to do their work," the governor said.

       According to a news release issued by the bank, the Canadian economy has stalled since the middle of 2023 and growth will likely remain close to zero through the first quarter of 2024. Economic growth is expected to strengthen gradually around the middle of 2024 to reach 0.8 percent in 2024 and 2.4 percent in 2025.

       The bank said the consumer price index ended the year at 3.4 percent and it expected inflation to remain close to 3 percent during the first half of this year before gradually easing, returning to the 2 percent target in 2025.

       The bank said the governing council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation and wants to see further and sustained easing in core inflation.

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       The bank is continuing its policy of quantitative tightening, the release said.