Canada's inflation rate in December rose to 2.4%, but key indicators eased.

The data released on Monday showed that Canada's CPI in December rose higher than expected, reaching 2.4%. This increase was mainly attributed to the base effect brought by last year's sales tax exemption policy, but the closely watched core inflation indicator has been cooling for the third consecutive month. The downward trend in core prices should make the Bank of Canada feel reassured. The central bank had kept the key policy rate unchanged at 2.25% in December, stating that this rate level was appropriate to bring inflation closer to its 2% target. The currency market is expecting the rate to remain unchanged until 2026.