The central bank keeps its rate unchanged because of weak economic results
This Wednesday, the Bank of Canada decided to keep its key lending rate at 0.5%, pointing to weak results in the labour market and forecasts on quite a moderate growth in the fourth quarter.
According to the BoC, although the global economy has become stronger, the continued international unstable situation is still affecting business confidence and investment with Canada’s trading partners negatively.
Bank of Canada is expected to keep its interest rate unchanged
This Wednesday, the central bank will release its new rate decision and official statement. The Bank of Canada is expected to keep the key lending rate at 0.50%. Higher oil prices thanks to the Organization of the Petroleum Exporting Countries (OPEC) cut agreement and better Canadian performance, will make the Bank follow its path until the end of this year.
Last year, the BoC governor Stephen Poloz cut the rate twice before another potential oil prices decrease, which was supposed to affect the national economy negatively. And he was right, as those cuts softened the hit slightly.
It looks like interest rates may remain change until 2019. With the latest remarks from the Bank of Canada Governor Stephen Poloz, we could say that only a serious economic hit can make the Bank change its today’s path.
Senior Economist at Manulife Asset Management, Frances Donald, analyzed certain comments Poloz made last week at different meetings. In her opinion, we have one solid reason to believe the central bank will take a long pause, and only a significant economic event can lead to another round of a rate cut.