Canada Monetary Policy


Bank of Canada remains on hold

At its 17 July monetary policy meeting, the Bank of Canada (BoC) left the target for the overnight rate unchanged at 1.00%, a decision widely expected by market analysts. Monetary authorities have left rates unchanged since September 2010. The Central Bank acknowledged that global economic growth has weakened recently and that some of the risks around the European crisis are materializing, leading to a deterioration in global financial conditions. On the Canadian economy, the Bank stated that while economic growth in the first quarter was slower than expected, "underlying economic momentum appears largely consistent with expectations". Regarding price developments, the Bank said that inflation is expected to fall below the mid-point of its target of 2.0% plus/minus 1.0% in the short terms due to lower gasoline prices, while core inflation should remain around 2.0%. Against this backdrop, the Central Bank maintained its position that some modest withdrawal of the present considerable monetary policy stimulus may become appropriate


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Canada Monetary Policy Chart

Canada Monetary Policy July 2012

Note: Target for the Overnight Rate in %.
Source: Bank of Canada (BoC).

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