Canada: Bank of Canada maintains overnight rate at 1.00%
January 17, 2012
At its 17 January monetary policy meeting, the Bank of Canada (BoC) left the target for the overnight rate unchanged at 1.00%, which was widely expected by market analysts. The Central Bank reaffirmed its dovish stance amid the ongoing sovereign debt crisis in Europe and heightened volatility in the financial markets, by asserting that ?with the target interest rate near historic lows and the financial system functioning well, there is considerable monetary policy stimulus in Canada.? Monetary authorities have left rates unchanged since September 2010. The Bank emphasized that economic growth will remain solid going forward, albeit constrained by external headwinds. In particular, policymakers expect consumer spending and housing activity to buoy Canadian economic growth. The Central Bank also confirmed that it expects inflation to moderate going forward.