16 Jul 2014
BoC keeps interest rate steady at 1% in July
FXStreet (Łódź) - The Bank of Canada decided to maintain its target for the overnight rate unchanged at 1% at its July monetary policy meeting, in line with forecasts. The Bank Rate was kept at 1.25% while the deposit rate remained at 0.75%
In a statement released after the decision was made known, the BoC said that in recent months inflation had risen close to the 2% target earlier than predicted, due to "temporary effects of higher energy prices, exchange rate pass-through and other sector-specific shocks, rather than to any change in domestic economic fundamentals.
As far as growth is concerned, the central bank stated that "economic activity in Canada is now projected to be a little weaker than previously forecast."
"However, the Bank still expects that the lower Canadian dollar and a projected strengthening in global demand will lead to a pickup in Canadian exports and business investment and, eventually, a more sustainable growth track."
Therefore the BoC decided that the current policy stance remains appropriate and added that it is "neutral with respect to the timing and direction of the next change to the policy rate, which will depend on how new information influences the outlook and assessment of risks."
In a statement released after the decision was made known, the BoC said that in recent months inflation had risen close to the 2% target earlier than predicted, due to "temporary effects of higher energy prices, exchange rate pass-through and other sector-specific shocks, rather than to any change in domestic economic fundamentals.
As far as growth is concerned, the central bank stated that "economic activity in Canada is now projected to be a little weaker than previously forecast."
"However, the Bank still expects that the lower Canadian dollar and a projected strengthening in global demand will lead to a pickup in Canadian exports and business investment and, eventually, a more sustainable growth track."
Therefore the BoC decided that the current policy stance remains appropriate and added that it is "neutral with respect to the timing and direction of the next change to the policy rate, which will depend on how new information influences the outlook and assessment of risks."