Canada: Bank of Canada leaves interest rates unchanged
September 5, 2012
At its 5 September 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 growth in both advanced and emerging economies continues to weaken and that the situation in Europe poses major risks to the global outlook. On the Canadian economy, the Bank stated that "underlying momentum remains at a pace roughly in line with the economy's production potential". 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 short term. Against this backdrop, the Central Bank maintained its position that "some modest withdrawal of the present considerable monetary policy stimulus may become appropriate".