Canada: Bank of Canada holds overnight rate steady in January
January 23, 2013
At its 23 January monetary policy meeting, the Bank of Canada (BoC) left the target for the overnight rate unchanged at 1.00%, in a decision widely expected by market analysts. Monetary authorities have left rates unchanged since September 2010.
The Central Bank stated that growth in the United States is "continuing at a gradual pace" and that Europe remains mired in recession. On the Canadian economy, the Bank commented that the slowdown observed in the second half of 2012 "was more pronounced" than expected but it anticipates economic activity to pick up in 2013.
Regarding price developments, the Bank stated that inflation is expected to return to the mid-point of its target of 2.0% plus/minus 1.0 percentage points in the second half of 2014. Against this backdrop, the Central Bank maintained a slightly tightening bias, stating that "some modest withdrawal of monetary policy stimulus will likely be required over time" but also added that "any such withdrawal is less imminent than previously anticipated".