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Bank of Canada maintains overnight rate target at 1/2 per cent
12/7/2016 | Posted in Mortgage News by Paul DeAdder | Back to Main Blog Page
The Bank of Canada is holding its benchmark interest rate at 0.5 per cent as economic conditions move along largely in line with its expectations.
In making the scheduled announcement, the central bank says while the global economy has strengthened, international uncertainty has negatively affected business confidence and investment among Canada's trading partners.
The bank says Canada's growth performance has also been close to its expectations, including a strong rebound in the third quarter.
It says Canadian inflation, which it carefully analyzes when making rate decisions, is slightly below what it had anticipated in large part because of lower food prices.
The decision to maintain the rate was widely anticipated by experts and comes ahead of an announcement next week by the U.S. Federal Reserve, which is expected to raise its key interest rate.
In October, the Bank of Canada downgraded its growth outlook and governor Stephen Poloz said its governing council actively discussed cutting the trendsetting rate before deciding to keep it on hold.
